Quick summary: Our recommendation is to use eToro to short Synthetix. They have the most popular cryptocurrencies on offer, great support, and have an easy system for shorting cryptocurrencies in general.
While there are a lot of options out there for buying SNX, shorting is a different story. Luckily for us here in Australia, we do have a few crypto brokers and exchanges that allow for CFDs and shorting.
One of those brokers is eToro, which we’ll be using for this guide. Let’s get started!
How to Short Synthetix in Australia
A quick recap first on what shorting actually is: The main objective of shorting or short selling is to make a profit (of course). The idea is to sell a stock/cryptocurrency hoping it will drop in value so you can buy it back later for cheaper, thus creating a net profit.
Shorting Synthetix can be done in 4 easy steps:
1. Choose a crypto 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 crypto broker to follow along, they all work very similarly.
2. Create an account on the cryptocurrency trading platform
Let’s start with just signing up with eToro.
The sign-up process is very quick and easy, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your eToro account
Next is funding your account. You have several options when it comes to depositing AUD into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Synthetix
Now for the actual shorting:
- Starting off at the search bar at the top, find Synthetix by entering the name or symbol.
- Then 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 sell the stock.
- 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!
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 complex compared to eToro, they do have more cryptocurrencies on offer.
Frequently Asked Questions
Can I short Synthetix on Binance?
Yes, you can short Synthetix on Binance. They have over 300 cryptocurrencies on offer and specialise in the crypto market. They also have a great app and competitive fees.
Synthetix is a protocol that allows for decentralized synthetic asset issuance. It was created by Kain Warwick, the Synthetix Foundation and Synthetix Foundation. When it was launched in September 2017, it was initially known as Havven. It was able to raise $30M through the token sale and seed round. Investors received 60 million HAV tokens. In 2018, Synthetix was created to expand its vision. Today, the platform is the largest Decentralized Exchange for Derivatives in the decentralized finance space (DeFi). It boasts a staggering $700M in Total Value Locked (TVL) as at November 2020.
Synthetic assets (or Synths) are derivatives which provide exposure to real assets on Ethereum blockchain. Synths can be used in the same way as derivatives in traditional financial markets. Users can hedge or reduce their risk, speculate about price movements, and gain access other markets and assets. It is possible to do all of this without ever having to hold the underlying asset.
The Synthetix network token (SNX), which is primarily used for collateral, is used to mint synthetic assets. SNX holders can visit Mintr to deposit their SNX into Synthetix smart contractual and create sUSD - synthetic United States dollar. Two factors will affect the amount and the rate of sUSD minted. C-Ratio currently stands at 600%. A user would need at least 6 SNX collateral to make 1 sUSD.
SNX can also earn rewards. SNX holders who put their SNX in the platform are incentivized through two main reward mechanisms. i) Exchange rewards and ii). Staking rewards. Synthetix trades generate exchange rewards. This reward can be 0.1 to 1% of the trade value but is generally 0.3%. Staking rewards are rewards from the protocol’s inflationary currency supply. The protocol generates new SNX and distributes it to holders of SNX tokens. These rewards are paid out as SNX pro-rata on a weekly basis, and are escrowed for one year. However, compliance with the C-Ratio target is required for this reward.
Synthetix also offers liquidity provider rewards, which are time-limited. These can be viewed by clicking on the LP Reward tab in Mintr.
Since 2017, Synthetix Foundation is responsible for managing the protocol. It does so through two mechanisms: i. Synthetix Improvement Proposals or SIPs and ii. Systix Configuration Change Proposals or SCCPs. The first is about proposed changes to Synthetix’s smart contracts, while the latter concerns proposed changes to values like the C Ratio and exchange fee. All the SIPs and SCCPs are available at their respective links.
In line with greater decentralization, however, the Synthetix Foundation ceased to exist on 28 July 2020. It was replaced by three autonomous decentralized organizations (DAOs), namely ProtocolDAO; GrantsDAO; and SynthetixDAO.