Decentralised synthetic assets

dHEDGE Debt Mirror Index Token - Live on Optimism

dHEDGE Debt Mirror Index Token - Live on Optimism

Synthetix has partnered with dHEDGE to deploy a one-click debt mirror index for SNX stakers on Optimism. Initially, this tool was launched onto mainnet, but it is now live on Optimism.

With this tool, each staker can hedge their exposure to the debt pool.

Main article points:

  • dHEDGE & Toros Finance tool that helps automate SNX stakers’ debt management by automatically mirroring debt pool on Optimism.
  • dHEDGE Debt Mirror Index Token (dSNX) was initially launched onto Ethereum Mainnet, but is now launching onto Optimism.
  • To activate it, a staker needs to purchase a debt mirror index token (dSNX) on the Synthetix dAPP - Manage tab (Powered by dHEDGE) - Make sure you're connected to Optimism.

The Challenge for SNX Stakers

SNX stakers are exposed to the price fluctuations of all outstanding synths and have the challenge of hedging their exposure to the debt pool. To hedge this exposure, stakers need to replicate the debt pool by buying (or shorting if required) the underlying assets of outstanding synths (e.g. if debt pool is 50%sUSD & 50%sETH, if one wants to be hedged, he/she would need to hold 50%USD & 50%ETH). This is an expensive and tedious process that requires ongoing management.

The dHEDGE team has introduced a simple one-click solution that handles debt hedging by automatically replicating the global debt pool. To activate it, a staker needs to purchase dSNX tokens to automatically hedge their debt.

How to Utilize the dHEDGE dSNX Token Solution?

All a staker must do is navigate to the Synthetix Staking website’s debt section and purchase the dSNX token through the UI which is integrated into the ‘Manage Tab’. 1 sUSD worth of debt mirror token will hedge one sUSD worth of debt. Make sure you're connected to Optimism!

Example: If you have 100,000 of sUSD active debt and purchase 100,000 of the dHEDGE debt mirror index token, it will keep your debt in parity with the debt pool without any outside interaction.

Note: Toros.Finance is currently showing the wrong values in their UI when purchasing dSNX. This is only a visual bug. Please purchase through dHEDGE or the Staking dAPP to view the correct values.

To withdraw, a user must navigate to https://toros.finance/derivative/dsnx and click the 'Sell' button.

The Debt Mirror Index in the Backend

This index token is continuously rebalanced to hold the assets that comprise the debt pool, including borrowing and shorting via AAVE any % required by the debt pool.

Please visit the blog post on the dHEDGE site for specifics - dHEDGE Docs

Any Questions?

If you've got any comments or questions please join the conversation on Discord.