- Synthetix Perps is a decentralized Perps trading protocol built on Optimism that offers low fees and an efficient trading experience. Synthetix Perps offers the backend infrastructure that can be integrated by any protocol, such as Kwenta, Polynomial, and Decentrex
- It utilizes a novel exchange engine to match traders and off-chain oracles provided by Pyth Network to decrease fees, minimize risk, increase scalability, and improve the trading experience for users.
- The platform offers capital efficiency and unrivaled leverage on 40+ assets, allowing traders to use up to 50x leverage on positions.
- Synthetix Perps offers some of the lowest taker/maker fees in the industry, with maker fees as low as 2bps.
Decentralized trading protocols, like Synthetix Perps, are increasingly popular in the DeFi space due to their permissionless, non-custodial, low-fee nature. The newest version of Synthetix offers efficient, flexible trading with deep liquidity, low fees, and features for risk management to maintain market balance and protect liquidity providers.
What is Synthetix Perps?
Synthetix Perps is the latest version of Synthetix's groundbreaking trading protocol that has set the standard for decentralized trading, offering 1-2 bps for gold/silver and 2-15 bps for crypto pairs. It is a permissionless and decentralized platform built on top of the Ethereum ecosystem that offers traders access to a range of assets, making it an attractive option for those looking for a low-fee and efficient trading experience.
Synthetix Perps has achieved over $14bn cumulative volume and is quickly becoming the go-to trading protocol for many traders.
How Does Synthetix Perps Work?
Synthetix Perps utilizes a novel exchange engine that efficiently matches buyers and sellers, with SNX stakers serving as temporary counterparties as needed. This exchange engine minimizes risk for perps LPs (stakers) through innovative risk management features such as dynamic funding rates and a price impact function. This creates arbitrage opportunities that keep markets neutral in the long run. By minimizing risk, Synthetix Perps can increase scalability and capital efficiency while supporting a wider range of markets.
The game-changing feature of Synthetix Perps is the off-chain oracles provided by Pyth Network, which significantly reduces perps fees, making it competitive with centralized perps platforms. These oracles save prices off-chain and are provided to traders by keepers when a trade is initiated. By verifying prices on-chain, this validation process minimizes the risk of frontrunning attacks.
What sets Synthetix Perps apart?
Synthetix Perps offers unrivaled capital efficiency for on-chain leverage across a wide range of assets, allowing traders to use up to 50x leverage on positions, significantly higher than the 20x limit on traditional assets and 10x on alts found on other trading platforms. This empowers traders to fully capture the potential of their trades, making Synthetix Perps an ideal choice for all traders looking for greater flexibility and control in their trading strategies.
Synthetix Perps use a off-chain oracles provided by Pyth Network allowing perps fees to be reduced to 2-15bps across crypto, forex, and commodities pairs. They work as follows: off-chain oracles save prices off-chain and are provided to traders by keepers when a trade is initiated, with a 2-3 second delay for final confirmation. The on-chain validation process includes staleness checks, key-threshold confirmation, and a final check against on-chain oracles.
The new mechanism allows for more predictable funding rates based on a dynamic funding rate model rather than relying on the direct result of market skew. The new funding rate mechanism has been improved to incentivize traders to maintain market balance, which reduces the risks for liquidity providers. It has the potential to enable DeFi markets to scale in ways that were previously unachievable.
Furthermore, Synthetix Perps is highly competitive in terms of fees, offering some of the lowest taker/maker fees in the industry across its 42 assets.
Unlike other platforms that are restricted to a single front end, Synthetix is paving the way for a more customizable and decentralized experience. Thanks to the permissionless design of Synthetix Perps, integration is now easier than ever before, allowing developers to build a range of front-ends tailored to the needs of different types of traders. This approach not only enhances the user experience but also promotes innovation in the DeFi space by encouraging the development of new and creative trading products. With the potential for multiple integrators to host Synthetix Perps, the possibilities for decentralized trading are truly endless.
The Advantages of Synthetix Perps
The recent Perps V2 upgrade to Synthetix Perps enables low fees, unconstrained open interest limits, and higher asset compatibility, making it competitive with centralized exchanges (CEXs). This is made possible through the use of off-chain oracles provided by Pyth Network, which greatly minimizes fees and improves the trading experience for users. With lower fees, traders can execute trades more efficiently, making Synthetix Perps an attractive option for those seeking a cost-effective trading experience. This enables the use of various trading strategies that may not have been possible in the past to execute efficiently, such as hedging positions and various forms of arbitrage.
The introduction of dynamic funding rates has made them more predictable, as the funding rates gradually adjust based on the long/short skew. Furthermore, the addition of a price impact function creates premiums or discounts in the quoted prices, based on the current market skew, thus creating arbitrage opportunities for traders to bring the market back to a neutral state.
Decentralization is a key aspect of Synthetix Perps that sets it apart from centralized exchanges. With Synthetix Perps, you have full custody of your assets, and all contracts are open source and visible on-chain.
Synthetix Perps represents the future of decentralized trading, providing traders with a low-fee and efficient trading experience that rivals centralized exchanges. With its innovative exchange engine, risk management features, and off-chain oracles, Synthetix Perps enables traders to access a wide range of perps markets while minimizing fees and maximizing capital efficiency. The platform's integration with Optimism allows for seamless interaction and minimal fees, making it an attractive option for DeFi traders seeking a fully permissionless trading experience. Whether you're an experienced trader or new to the DeFi space, Synthetix Perps offers the ultimate trading protocol with an intuitive trading UI on Kwenta, Decentrex and Polynomial.