Synthetix Network Token
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The state of Synthetix

Introduction 2019 was a breakout year for Synthetix. The emergence of DeFi brought significant awareness to the project creating excitement about the potential of synthetic assets on Ethereum. Combined with the revised tokenomics and incentives in March, engagement accelerated throughout the year. Of course increased scrutiny often brings a mix of both positive and negative perspectives. There was skepticism about a number of aspects of the system, and while most of this skepticism was justified, some of it reflected a misunderstanding of the stage of the project. We have said from the beginning that Synthetix is a highly experimental protocol and there are a number of assumptions about how it will function at maturity that are still untested. Synthetix employs a novel mechanism that has little precedent, so it is difficult to reason about how the market will respond to it. This post will attempt to discuss the current state of the project, the risks that still exist and the mitigation strategies planned for dealing with them. Hopefully this will establish a shared framework from which to discuss the progress of the project and the prioritisation of the areas of focus for 2020. As always we welcome criticism, particularly when that criticism is well reasoned and reflects an understanding of the trade-offs that Synthetix embodies. Helping to illuminate these trade-offs and design decisions can only benefit the long term viability of the project.

Current state If we are being generous, Synthetix is likely less than 50% implemented. This can often be confusing to people new to the project, because on the surface it looks like it is a complete and functioning system. You can go to Synthetix.Exchange and trade over twenty different assets including novel tokens like the sDeFi index as well as inverse (short) indexes of assets like LINK and XTZ which are difficult to short typically. Yet despite appearances of completeness there are mor...

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