This project is still very young and novel in nature. Before you trade, provide liquidity, or use any aspect of the SynLev protocol it is important to understand how the system works. As always with any DeFi product do your own research and decide for yourself.
Like always there risks while interacting with smart contracts.
SynLev is not yet formally audited. Audits are a high priority and we will begin a formal audit once we begin a 2 Million SYN token stale starting on 21 Dec 2020.
If you have questions about how to do anything, we can help you on:
But if you think something can be improved, or you found a bug, we want to squash it. Please post it here:
Github — create a new issue in the relevant repository.
SynLev exchange: open leveraged position on Assets like ETH/USD and BTC/USD.
Each leveraged token represents leveraged exposure as well as exposure to the dynamic nature of the SynLev exchange. It is important to know that leverage is dynamic. A 3X token rarely has exactly 3X leverage, typically leverage levels range between 1.5X - 4.5X. For example a 3XBULLETH/USD position is open at 500 ETH/USD strike price at 3.5X leverage, ETH/USD experiences a 3% price drop resulting in a 10.5% drop in token value. Later ETH gains 3% however leverage has changed to 2.5X leverage, resulting in a 7.5% gain in token value. Even though ETH/USD experiences the same percentage price changes the 3XBULLETH/USD token experiences disproportionately higher losses.
It is worth noting that this effect can also occur in the opposite manner. Leading towards disproportionately higher gains than expected.
No. A distinct feature of SynLev assets are that they cannot be liquidated. This is achieved through multiple methods. First, price calculations are not continuous. Price refreshes are synchronized with Chainlink price updates. Which update on the oracle “heartbeat” and when the price changes by threshold percent, generally 0.2 - 0.7%. In the edge case that there is a large price change loss on any one asset hard capped to 90%. Second, leverage is not static, a 3X asset will actually perform anywhere from 1.5–4.5X depending on how the asset pair is balanced. In effect the losses of a bull token feed the gains of another. Allowing assets to always maintain 100% liquidity without risk of liquidation.
Fees are split between SYN stakers and liquidity providers. Fees awarded to liquidity providers stay in the vault contract and are reincorporated into liquidity. Fees to SYN stakers are sent first to the SYN staking proxy then to the SYN staking contract.
SYN Staking Proxy: 0x0070f3e1147c03a1bb0caf80035b7c362d312119
SYN Staking Contract: 0xf21c4F3a748F38A0B244f649d19FdcC55678F576
What does SynLev exchange LP do?
Providing liquidity creates “virtual” bull and bear tokens that are owned by all liquidity providers. These tokens live in the vault contract to stabilize the asset pair. Virtual bull and bear tokens are balanced on every liquidity add/remove to always move bull:bear "virtual" tokens closer to a 1:1 ratio.
What is a Share Price?
When adding liquidity users are exchanging ETH for LP Shares. LP shares represent the ownership of “virtual” bull & bear tokens as well as half of the fees generated by trading activity; currently at 1% fees with half being awarded to liquidity providers and half to SYN stakers.
What are the risks involved using SynLev exchange?
Smart contract bug
Everyone engaging in any activity on the SynLev exchange is taking on counterparty risk. When buying a 3X ETH/USD BEAR the token holder is acting as a counterparty of the 3X ETH/USD BULL token holder. Meaning all gains of a BULL token must come from the losses of a BEAR token.
To better explain the risk and implications of providing liquidity we will look at 3 examples of how LP share price can increase, decrease, or stay static. For these examples we use the 3X ETH/USD as an example. In these examples we are also ignoring the .5% fees in trading fees liquidity providers earn.
Example 1: Bull Tokens Equity > Bear Tokens Equity and ETH Price is Increasing = LP Share Price Down
In this case market sentiment is bullish and more bull tokens have been minted on the SynLev Exchange. Currently there are 100 ETH in outstanding bull tokens, 50 ETH in outstanding bear tokens, and 400 ETH in liquidity (200 ETH bull & 200 ETH bear virtual tokens). Due to +1% ETH price increase bear equity falls 3.3%(8.25 ETH), due to a leverage level of 3.3X. Taking bull token equity to 102.75 ETH, bear token equity to 48.35 ETH, and liquidity to 398.9 ETH (205.5 ETH bull & 193.4 ETH bear virtual tokens). LP share price drops by .275%.
Example 2: Bull Tokens Equity > Bear Tokens Equity and ETH Price is Decreasing = LP Share Price Up
In this case market sentiment is bullish and more bull tokens have been minted on the SynLev Exchange. Currently there are 100 ETH in outstanding bull tokens, 50 ETH in outstanding bear tokens, and 400 ETH in liquidity (200 ETH bull & 200 ETH bear virtual tokens). Due to -1% ETH price increase bull equity falls 2.75%(8.25 ETH), due to a leverage level of 2.75X. Taking bull token equity to 97.25 ETH, bear token equity to 51.65 ETH, and liquidity to 401.1 ETH (194.5 ETH bull & 206.6 ETH bear virtual tokens). LP share price increases by .275%.
Example 3: Bull Tokens Equity = Bear Tokens Equity
In this case market sentiment is neutral. Currently there are 100 ETH in outstanding bull tokens, 100 ETH in outstanding bear tokens, and 400 ETH in liquidity (200 ETH bull & 200 ETH bear virtual tokens). Due to +1% ETH price increase bear token equity falls 3% (9 ETH), due to a leverage level of 3X. Taking bull token equity to 103 ETH, bear token equity to 97 ETH, and liquidity to 400 ETH (206 ETH bull & 194 ETH bear virtual tokens). LP share price stays the same, regardless of positive or negative market movement.
Example 4: Bull Tokens Equity >>> Bear Tokens Equity
In the case there is 1000 ETH total equity. 800 bull and 200 bear. Bull leverage is 1.87X and bear leverage would be 7.48X but it's capped to 4.5X. In this example it's very important that price/equity changes are calculated from the losing side.
ETH goes +1%, bear loses 4.5% or 9 ETH. Bull gains 9 ETH or 1.125%.
ETH goes -1%, bull loses 1.87% or 14.96 ETH. Bear gains 14.96 ETH or 7.48%
The key point of this example is that when bull/bear becomes very imbalanced there is a major bias towards the "underdog". In the above example BEAR tokens have a 4.5X negative leverage but a 7.48X positive leverage. The goal being to incentiveize users to balance the bull/bear equity ratio.
We can take away from the above examples that liquidity providers are effectively hedged against market sentiment. SynLev assets have a slight bias against market sentiment. This is in an effort to both balance bull/bear tokens as a whole and ensure that liquidity providers over the long term are very slightly favored.
If you're using MetaMask and you put your transaction through but it's going too slow, you have the option to speed it up by clicking the
speed up button below your last pending transaction under "activity". This should resend the same TX again with a higher gas price to get it confirmed faster.
If you've tried everything and your transaction is still stuck pending, you can fix it by sending a transaction to the nonce of the first stuck transaction with a high gas price to overwrite the stuck queue. Here's a good guide explaining how to do this.