Is Synthetix SNX Cryptocurrency Scam?

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Blockchain247

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Have you ever heard about Synthetix SNX? Do you have any interest in this cryptocurrency and want to invest in it? We advise you to learn more about this project before starting to go deeply in it because it may be scam in the market. Read this review to find out more about SNX.

Synthetix is a platform that has a protocol decentralized finance which allows the issuance of securities or synthetic assets. These synthetic assets can be traded and interacted with other assets as if they were real assets. All this, within the framework of an (almost) completely decentralized market.

Synthetix (SNX) is an altcoin (alternative cryptocurrency). Therefore, you can not only use it to create your own decentralized synthetic assets (Synths), but you can also invest in them through your favorite cryptocurrency exchange.

Is Synthetix (SNX) legitimate?​

Synthetix is high risk​

Synthetix is an ecosystem which allows anyone to deposit the SNX token in exchange for what are called “synths.” In fact, synths contain risks which are identical to the risks of any class of derivative and these risks are most easily summed up as “leverage-related”.

Synthetix and all other DeFi related services are still vulnerable to attacks by hackers since they are interconnected by design, and typically require no sign-up procedures to use. If a large enough flash loan attack were carried out, it could render a system like Synthetix insolvent, especially if it targeted SNX. For example, if we take this year’s BZx exchange attack as our key example, it is easy to see why.

In February, a hacker essentially used one loan on the dYdX exchange to game the DeFi system. In doing so, they began with what is called a flash loan. Generally, a flash loan is the same as a loan via Synthetix or Compound except it requires no collateral and must be repaid after one transaction with it.

Using this feature via dYdX, the hacker took out 10,000 Ether, then proceeded to place several positions across dYdX, Compound, and BZx, which ended in a short of the WBTC stablecoin, an unpaid loan from BZx, and a profit of 1,193 ETH, which they then used to settle their initial loan with dYdX.

After just a few days, a new hack occurred that briefly pumped the price of the synth, sUSD. Luckily, however, this attack was stymied by the fact that an insurance fund was already in place to cover all of the losses involved.

Synthetix complaints​

On a social media platform called Reddit, users have their complaints with Synthetix that they do not provide clear information. According to Neophyte, Synthetix promises to be a stablecoin and not only that but to be able to utilise it to use dollars, stocks and bonds and he also believes even trade them. This is part of their roadmap but if it was ever used to trade stocks it might be labeled as a security. He cannot find any information that Synthetix actually works as a stablecoin.

Another user also commented on his own thoughts about Synthetix that the project is trustless.

“Is Synthetix scam?” We cannot confirm yet because we should acknowledge that individual opinions are not very necessary. We need more facts about Synthetix to prove its legitimacy. Feel free to leave the comment below to raise your question or any opinion you have.
 

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