Synthetix vs THORchain: Features, Analysis, and Comparison

Introduction

In this rapidly evolving ecosystem of cryptos and DeFi, Synthetix, and THORchain are two crypto projects that are continually trying to overcome issues and challenges of this space, empowering users with an accessible and resilient decentralized financial system. In this article, we’ll explore Synthetix (SNX) and THORchain (RUNE), their features, compare them, and more.

What is Synthetix?

Synthetix, previously known as Havven, is a decentralized trading platform built on the Ethereum blockchain for trading real-world assets like fiat currencies, gold, and other commodities, stocks, etc., in the form of tokens. Simply put, Synthetix transforms real-world assets, such as gold and shares, into ERC-20 tokens called “Synths” and lets you trade them directly without the need for intermediaries. However, owning a Synth does not mean you own the actual underlying asset; instead, Synthetix empowers traders to leverage liquidity and earn profits by buying and selling these synthetic assets. 

Synthetix’s working is kind of similar to Marker DAO’s- like Marker requires users to lock ETH tokens as collateral to generate DAI stablecoins, Synthetic needs native crypto SNX to be locked in protocols’ smart contracts to collateralize synthetic assets and issue synthetic synths. Apart from this, SNX is also used for staking to secure the network, governance, incentivize users, and other utility purposes in its ecosystem.

Key features of Synthetix

• Synthetix protocol is designed in such a way that users do not suffer from the illiquidity and slippage issues of typical decentralized exchanges.
• It relies on a decentralized network of oracles to bring real-time off-chain asset prices to the platform’s smart contracts.
• Synthetix’s perpetual futures exchange- Synthetix perps allow users to trade and gain exposure to non-blockchain assets at low fees without the need to hold them physically.
• It is powered by two tokens: native token Syntetix- SNX and synthetic assets- Snyths which represent underlying assets.
• It ensures the protocol’s stability by incentivizing SNX stakers to maintain a healthy collateralization ratio (C-Ratio). If this ratio falls below the target, stakers are at risk of being liquidated with a penalty and will be unable to claim their rewards until they restore the ratio.

Latest news on SNX

According to its data, Synthix platform has a trading volume of 200-300 million trades per day and supports around 42 markets for trading with open interest of over 100 million.

42 Perps markets with a staggering 100M+ open interest and daily trading volumes of 200-300m.

Synthetix Perps continues to shine, thanks to the hard work of the entire ecosystem of builders who make it all possible. Great job!

— Synthetix ⚔️ (@synthetix_io) June 22, 2023

Users can now trade stETH (staked Ethereum tokens) from Lido Finance on the Synthetix Perps platform without relying on centralized exchanges.

It’s live! Synthetix now supports @LidoFinance‘s stETH for leverage trading on Synthetix Perps. Synthetix takes pride in being the first protocol to offer stETH perps, as no other CEX/DEX currently supports it.

42 total perps markets 🥱

Learn more 👇https://t.co/ZJw9ZCwWzv pic.twitter.com/QlpcIq6kUO

— Synthetix ⚔️ (@synthetix_io) June 15, 2023

What is THORchain?

THORchain is a layer-1 decentralized cross-chain protocol backed by Cosmos-SDK and Tendermint consensus engine that enables users to swap non-native crypto assets such as BNB to ETH or vice versa in a single platform. It was founded and built by a pseudo-anonymous team of developer participants from Binance Dexathon back in 2018; the team continued to work on the project and finally launched its single chain- chaosnet, in 2021. 

THORchain utilizes a liquidity pool and Automated Market Maker (AMM) model to enable the swapping of cryptos between different blockchains with deep liquidity and low fees. When a user swaps asset A for asset B, the protocol first swaps asset A with RUNE (native crypto), and RUNE is then swapped with asset B, completing the exchange of assets without wrapping them. RUNE is a native asset of THORchain that is used for asset settlement, securing and governing the network, incentivizing liquidity providers, etc.

Key features of THORchain

• THORchain’s AMM model determines the price of crypto assets according to their demand and supply in the liquidity pools.
• RUNE provides token holders with the right to participate in the protocol’s governance and vote on the liquidity of various chains.
• THORchain supports swapping cryptos on 8 blockchains, including Bitcoin, Ethereum, Litecoin, BNB chain, and Avalanche.
• Its decentralized exchange does not require users to create an account, they can simply swap tokens by connecting their wallets.
• Users(liquidity providers) who deposit their assets in the protocol’s liquidity pool are rewarded with LP incentives and a share of fees incurred from the pool.
• It employs several technologies like Bifrost Protocol, Threshold Signature Schemes (TSS), Tendermint consensus, etc., to secure the platform’s asset vaults. 

Latest news on RUNE

In the latest report, THORchain collected a total of $1.98 million in liquidity fees with a total volume of $520 million in the second quarter of 2023. Its community is continually working on new upgrades and features to incorporate into the platform, such as streaming swaps, zero-interest lending products, Binance Smart Chain integration, and more.

THORChain Q2 2023 Ecosystem Report

– Network Stats
– Look back at Q2
– What is ongoing now
– Pipeline aheadhttps://t.co/JyYGKJmShR

— THORChain (@THORChain) July 6, 2023

Comparing THORchain vs Synthetix

Here’s a brief comparison of Synthetix and THORchain:

Key Differences between Synthetix vs THORchain

• Synthetix focuses on the creation and trading of synthetic assets that track the price of underlying assets, letting users gain exposure to various asset classes, while THORChain enables the exchange of native layer-1 assets across different blockchains without the need for wrapping.
• Synthetix is built on Ethereum and Optimistic- layer 2 scaling solution and is backed by the Ethereum PoS consensus mechanism. THORChain, on the other hand, runs through the Cosmos SDK and Tendermint with a layered Byzantine Fault Tolerance (BFT) consensus mechanism.
• Synthetix utilizes SNX stakers to participate in governance and earn rewards through exchange fees and staking rewards. THORChain’s native asset RUNE rewards liquidity providers and node operators with block rewards and allows token holders to vote on asset priorities and contribute to governance.
• SNX crypto has a total supply of 320.57 million, and the market cap is standing at $570 million. RUNE tokens’ total token supply is 500 million, with a current market cap of $347 million as of July 06, 2023.

Synthetix (SNX) Price Prediction

• SNX price has witnessed various twists and turns, but in a positive direction, it gained over 120% in the first three months of 2023.
• SNX price dramatically dropped in June to $1.6 following rejection from resistance at $2.5. It has also formed a death cross of 200 MA and 50 MA (moving averages) in the 1-day trading chart.
• However, SNX price has managed to recover over 23% since then, and if market sentiment becomes bullish, it might rise more.

Read More: Synthetix Price Prediction

THORchain (RUNE) Price Prediction

• RUNE price showed strength at the beginning of the year; however, it has been following a downtrend since April with rejection at $1.74.
• It dropped by more than 50% and reached a YTD low of $0.7836 but has made a bullish divergence from the oversold zone as per the RSI indicator.
• It is currently trading at $1.04 with a resistance level at $1.2. If the RUNE price strengthens a bit, it might possibly go upto $1.4 in the upcoming months.

Read On: Rune Price Prediction

Should you buy SNX or RUNE?

SNX and RUNE have performed pretty well amidst downturns in crypto markets; with their compelling features and diverse use cases, both projects boast substantial potential with a thriving community behind them. Thus, Investors are advised to do thorough research on projects, analyze risks and then invest in cryptos according to their preference and risk appetite.

How to invest in Synthetix (SNX) and THORchain (RUNE)?

Investing in Synthetix SNX or THORchain RUNE is extremely simple, fast, and secure with the CoinDCX App. All you need to do is register yourself and verify. To register, follow the below-mentioned steps:

• Download CoinDCX App

• Register by entering your details.

• Complete your KYC
• Once your profile is verified, add funds to your wallet and Buy SNX or RUNE.