Synthetix is a project that gained a massive amount of traction even before the eruption of the cryptocurrency market in November 2021. As of today, Synthetix is successfully moving upward despite the downtrend on the market.
What is Synthetix?
Synthetix is a decentralized liquidity provisioning protocol that can be used by any other protocol for various purposes. Synthetix Network's most popular solution is the issuance of synthetic assets that track and provide returns on the underlying asset without requiring a person to directly hold that asset.
Synthetic assets allow the creation of a blockchainized version of tradfi assets, which makes the cross-industry trading concept a reality. Without leaving the digital assets industry, investors gain exposure to assets that cannot be transferred on the blockchain.
Synthetix acts as a liquidity provider for the aforementioned assets. In addition to synthetic assets, the protocol is actively developing Perps V2, which are essentially low-fee on-chain futures based on the usage of off-chain oracles and Synthetix V3, which will bring the permissionless derivatives trading protocol to life.
Why is SNX rallying?
Despite the strong fundamentals and the prosperity of the protocol back in 2021, today's rally was mostly fueled by the general recovery of the cryptocurrency market. According to the daily chart of SNX, the asset successfully broke the local resistance level reflected in the 50-day moving average.
The movement toward the next resistance at approximately $0.00012 would be the next logical target for SNX. Unfortunately, SNX's future mostly depends on the general state of the market.
In their latest announcement, SNX announced the curve governance proposal that will significantly reduce swap fees and increase the number of trade routes through SNX, which should positively affect the protocol's revenue and fuel the token's price increase on the market.