Summary: Shorting Synthetix is pretty straightforward, all you need is a cryptocurrency trading platform that allows for short selling. While there are a few exchanges out there that have added the ability to short crypto, our recommendation is to use eToro. They’re well-known, have a global presence, and are trusted by millions of users from 100+ countries.
We’ll be using eToro in our guide, you can sign up with one of the sign-up buttons below.
Before we get started, let’s quickly explain what shorting is (for those that are new to it). Shorting is the practice of selling a cryptocurrency hoping it will drop in price so you can buy it back later for cheaper… which, if successful, will give you a net profit.
It might sound a bit complex but don’t worry, it’s a lot easier than you might think.
How to Short Synthetix
Shorting Synthetix can be done in 4 steps:
- Find a cryptocurrency exchange
- Sign up with the exchange
- Fund your account with fiat or crypto
- Short Synthetix
1. Find a cryptocurrency exchange
As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.
You can, of course, use any other cryptocurrency exchange that allows for short selling.
2. Sign up with the crypto exchange
Let’s start with creating an account on eToro.
The sign-up process is very easy, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your account
Next is funding your account. You have several deposit methods to choose from when depositing funds into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Synthetix
These are the steps to follow to execute a short sell:
- Go to the search bar at the top, find Synthetix by entering the name.
- On the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
- At the top of the trading interface: Click on sell to short the crypto.
- Enter the amount for which you want to sell Synthetix and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Synthetix has dropped, go to your Portfolio, find the Synthetix trade, and click on the red cross to close the trade.
If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.
Congratulations, now you know how to short Synthetix!
Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.
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Where to Short Synthetix (SNX)
Aside from eToro, the other major exchange you can use is Binance.
While Binance tends to be a bit more advanced when compared with eToro, they do have a lot more digital assets to trade with.
Frequently Asked Questions
Can I short Synthetix on Binance?
Yes, you can short Synthetix on Binance. They have over 300 cryptocurrencies on offer, have a decent phone app and a lot of advanced trading features.
Synthetix was founded in September 2017 by Kain Warswick and the Synthetix Foundation. At first, the company was called Havven. It launched in September 2017. It managed to raise $30m through its seed round and token sales, selling 60 million HAV coins to investors. In 2018, Synthetix became a new brand. The platform, which is now the largest decentralized exchange in derivatives within the decentralized finance sector (DeFi), has a staggering $700M in total value (TVL), as it was November 2020.
Synthetic assets also known as Synths or derivatives, allow users to have exposure to real-world assets via the Ethereum blockchain. Synths work in the same manner as traditional financial derivatives. Users can hedge and reduce risk, speculate on price movements, and access unavailable markets or assets. These actions can be done without the need for an individual to own the underlying assets.
SNX, Synthetix Net Token (SNX), can be used as collateral to mint synthetic asset. SNX owners can go to Mintr and stake their SNX to the Synthetix smart agreement to create sUSD – synthetic United States dollars. The amount of sUSD minted depends on two factors: i. the amount of SNX that has been staked and ii. the collateralization ratio of the platform. C-Ratio at the moment is 600%. In other words, to mint one sUSD, a user needs to stake at most 6 SNX as collateral.
SNX can also help you earn rewards. SNX holders who invest their SNX onto the platform are incentivised to do so by two main reward mechanisms: i. Exchange rewards and ii. Staking rewards. Synthetix generates exchange rewards whenever there is a trade. It can be 0.1%-1%, but in most cases it is 0.3%. Staking rewards, on the other hand, are rewards from Synthetix's inflationary monetary supply. All SNX holders who have staked their tokens receive new SNX. These rewards are distributed pro-rata weekly and escrowed up to one year. This is subject to compliance by the target C–Ratio.
Synthetix also offers some other incentives that are limited in time, such as liquidity provider reward. You can view them on Mintr by clicking "LP Rewards Tab".
Since the inception of the protocol in 2017, it has been managed by the Synthetix Foundation. It does this by two proposal mechanisms: the Synthetix Improvement Proposals and the Synthetix Configuration Change Proposals. The first is for proposed changes to Synthetix’s smart contractual, while SCCPs are for proposed changes of values such as C-Ratios and exchange fees. You can freely view the SIPs as well as SCCPs by clicking on their respective links.
The Synthetix Foundation, however, was decommissioned in accordance with the move to greater decentralization. Instead, three decentralized autonomous organisations (DAOs), were created: i. ProtocolDAO, GrantsDAO and, iii. SynthetixDAO.