2020 would be authoritatively said to the year of DeFi. A new sub-sector–and a promising one in that matter, it has revolutionized the way finance is done. With blockchain as the base layer, innovative creators have extended on what Satoshi Nakamoto built when he launched Bitcoin.
The Year of DeFi
Fueling the success of DeFi is the tokenization capability and security of the enabling smart contracting platform.
Thanks in part to the first-mover advantage of Ethereum–and the level of participation now that it was the dominant platform during the ICO-Hysteria, the network is jam-packed with different tokens most of which comply with the ERC-20 standard.
Combined with well-developed infrastructure, a native currency endorsed by policymakers, more projects are flocking to Ethereum.
This time, their cross-hairs are fixed on resolving the way trading of different assets is done and the porting of the same principles to the blockchain but without the middle man.
Over $12.6 Billion Locked Up
Cumulatively, the DeFi scene locks over $12.6 billion worth of ETH and different assets according to data streams from Etherscan. Out of this, the most popular DeFi protocol is a decentralized exchange, Uniswap.
For what truly matters, Uniswap’s popularity arises from its value proposition. Only until recently, it had not governance token, truly embodying the spirit of decentralization.
Nonetheless, unlike Bancor—which was one of the first DEX in Ethereum, it is one of the most active with trading volumes, at one point in late September 2020, its volumes surpassed that of Coinbase Pro—one of the oldest US-based exchange.
DeFi is maturing and as it does, decentralized exchanges offer what traders truly desire. This time, it does it so efficiently with low slippage. At the height of the decentralized exchange, revolution is the ability of traders to swap tokens without the need of a trusted authority. By eliminating the middle man, the risks of hacking—and other counter-party risks, are eliminated.
For this reason, the trading part of DeFi has seen unprecedented growth. There exist protocols supporting a wide range of tokens where liquidity provision is incentivized. Not only can traders swap tokens trustlessly but they can participate in derivatives, trading options, futures, and perpetual swaps.
Now, like what Binance and FTX are doing in the centralized world, SynLev wants to introduce the liquid trading of decentralized synthetic leveraged asset tokens with zero risks of liquidation.
The most succesful DEX innovations have been Peer to Pool contracts where liquidity providers pool liquidity to offer a great and liquid user experience for the peers via an automated market maker smart contract. DEX’s trying to replicate centralized exchanges with on-chain order books have failed and smart project are realizing that PEER TO POOL is the succesful way to rapidly grow permissionless exchange products.
Synlev is one of the only undiscovered low marketcap (below 1M) gems that offers all ingredients for rapid growth.
As a primer, SynLev is built on Ethereum by an anonymous team of skilled developers. As such, the overall performance directly depends on Ethereum’s. Just like other on-chain DeFi protocols.
However, the main differentiator is that the DEX is also built with Chainlink oracles. Through these oracles, SynLev can connect verified and approved price feeds from the real-world as triggers for SynLev smart contracts.
From SynLev’s whitepaper, the goal is to provide trustless, decentralized, and non-KYC gated leverage assets similar to traditional leveraged ETFs. In the latter’s case, liquidity is from debt and fund re-balancing.
SynLev will chart a different path and hold on to the ideals of decentralization as its main value proposition while keeping leverage of a typical “3X” synthetic leveraged asset token within a 1.5X and 4.5X range enforceable via a loss limiter.
For a balanced and autonomous system, SynLev only supports assets, commodities, and indices with decentralized public oracles.
By incentivizing liquidity provision by rewarding users with the SYN tokens, it shall bootstrap liquidity from the community. Assets are also not collaterized by shared pools ensuring consistent and deep liquidity.
All SynLev assets will be deployed in isolated pairs and collateralized by liquidity providers, the performance of the opposing pair, and ETH required to mint tokens.
In this requirement, the position of leveraged BULL and BEAR asset tokens are collaterized by the opposition position, not through debt being held by a single individual or entity.
Besides, the isolation of pairs is mitigation against rapid price movements of a leverage position, compartmentalizing the system, and shielding them from unexpected price volatility. This drastically reduces the counter-party risk.
To incentivize participation, fees generated from asset minting and burning will be distributed to SYN stakers and liquidity providers. For every buying and selling event, the protocol charges a 0.4 percent fee distributed where 0.2% goes to SYN stakers and 0.2% to the liquidity pool providers. Synthetic assets are one of the most popular traded products in the traditional finance sector and in a matter of weeks this will also be available via Synlev Peer to pool derivatives exchange.
The Automatic Calibration
Additionally, to keep the equity ratio as close to one, the protocol will introduce a variable sell penalty–capped at 15 percent–and Buy bonuses to balance the equity of asset pairs. The equity ratio acts as a balancer and is a ratio between BULL and BEAR tokens, determining leverage. If there are more BULL token buyers, its leverage decrease while the BEAR token leverage increases.
A sell penalty is incurred with an asset is sold and burned, an event that tends to push the equity ratio above 1. Penalties are diverted to a pool providing funds to pay out bonuses.
On the flip side, the buy bonuses result when minting new assets forcing the equity ratio of a leverage token position to trend towards 1. In this case, the protocol will incentivize users to re-balance the token pair via buys, keeping the equity ratio stable and desirably close to 1.
Liquidity providers receive half of the fees generated from the buying and selling of any listed leverage token pair depending on the amount—that directly determines the number of shares. Rewarded fees can be withdrawn anytime without withdrawing liquidity from the asset pair. Adding liquidity mints non-transferable BULL and BEAR tokens to the SynLev vault contract which are destroyed when liquidity is withdrawn.
SYN is an ERC-20 token for the SynLev ecosystem. It is not a governance token since control of the SynLev project is centralized.
Holders receive half the fees as a reward for users buying and selling leveraged tokens.
There initially was a 100 million SYN tokens as total supply but after cancelation of 2 future sales 17 million tokens are burnt so new max supply is 83 Million.
- 12 percent was airdropped to LINK and ETH holders. Claiming these tokens is a manual process
- 12 percent will be sold in a public sale to fund further growth after product launch
- 6 percent will be used to boost early liquidity programs
- 15 percent will be used for business development
- 15 percent is set aside to power the project’s liquidity boost programs
- 40 percent is assigned for the dev team to stake and earn returning income to keep developing the protocol
All airdropped tokens have been claimed. There are 11.458 million SYN tokens in circulation at the time of writing.
The token’s open price at Uniswap stood at $0.095 with an average daily trading volume of $504k. At the time of writing, each SYN trades at $0.068 with an average daily volume of $228k.
Prices are up 14 percent in the last two weeks of trading but down 36 percent from its all-time high of $0.111 registered on Oct 17.
Most SYN trading activity is from Uniswap V2 though the token is already listed at Bilaxy.
- $SYN token holders will be able to earn 0.2% fee on all trades on the network + liquidity pool providers earn the other 0.2% for each asset they offer liquidity which incentivizes adoption and participation on the network.
- SYNLEV is launching an onchain synthetic asset exchange with peer to pool mechanism so is able to offer deep liquidity from launch. Traders need liquidity. And Synlev might soon be able to offer deeper liquidity than popular order book based exchanges like FTX and possibly Binance. Uniswap did this for many spot trading pairs within half a year.
- More exchanges will likely list SYN as it gains success. After the public sale and the project gaining popularity, the odds of investors demanding more purchase channels will increase further boosting the token’s market cap and therefore price.
- The SynLev interface is intuitive and easy to use. The team is keen on making trading as easy as possible. The revamped interface is also easy to navigate.
- Several ETH browsers, not just MetaMask, are supported by SynLev making it easier for users to onboard and either stake or add liquidity.
- The SYN market cap is slow, at $815,253 at the time of writing. However, token performance hints at a possible under-valuation ahead of the main product launch.
- SynLev contract is verified, complete with an Etherscan logo. This makes it easier for stakers to participate. There are 478 addresses at the time of writing, generating 6,912 transfers revealing how the project is still under-the-radar.
- The team has fast-tracked the rollout of SynLev. Most of its core contracts are now live on the mainnet. A working beta of SynLev dApp was launched weeks ago. Presently, its code can be checked as there is a bounty program allocated 10 percent of all SYN in circulation. Bounty rewards can be up to $3,000.
- The Uniswap liquidity provider reward program is already live, concluding on Nov 17
- 500k SYN tokens will be distributed to ETH liquidity providers through the SynLev Exchange program for the first three weeks, concluding on Nov 23. Depending on the amount of ETH supplied as liquidity and the time take for liquidity provision, there is an incentive for users to earn extra tokens rather than holding via trading means.
- The first synthetic leverage asset, 3x ETH/USD BULL and BEAR pair, will launch in the coming weeks. Liquidity providers stand to earn fees from the buy and sell activity of this pair. The higher the trading volumes, the more fees SYN stakers will accrue.
- Liquidity providers need not worry about the exchange locking funds or its leaders being investigated and inconveniencing users. SynLev remains non-custodial and funds can are under the users.
- SynLev plans to support more leverage pairs. By starting with the ETH/USD BULL and BEAR asset, a dozen others—using Chainlink oracles–will be supported providing more rewards for SYN stakers and LPs who add liquidity to any of the listed pairs
- There will be one token sale where 10 million SYN tokens will be available for public investment at a 5 to 10 percent discount via Uniswap. This is a revision down from the three-stage token sale earlier announced. 10 million SYN and 7 million SYN tokens from the developer funds will be destroyed. The other five million SYN has now been reassigned to bootstrap liquidity of SynLev assets in Uniswap and other DEXes.
- The team is aligning their interests with those of the community through the use of proxy contracts employing time-locks and the use of multi-sign contracts. They also reduced the number of public token sales from three to one after feedback from the community. The circulating supply will be increased but with such a low market cap project with this product to be launched we expect this will be absorbed quickly. This would be different if it was a 10-40 Million marketcap project instead of the below 1 Million marketcap it is today.
- SynLev is carving out market share from wildly popular synthetic leveraged tokens offered by FTX Derivatives Exchange and Binance. Their approach is different and rids the middle man without KYC and censorship.
- With SynLev there are no liquidation risks as the pair automatically re-adjust. As the main value proposition, the integration of oracles solves the issue of non-transparent liquidations and other market manipulation prevalent in centralized exchanges. Ask yourself, how much would you value a non KYC bitmex where you can’t be liquidated :P