SUSD

Overview of SUSD

SUSD, also known as Synthetic USD, is a type of stablecoin in the cryptocurrency market. Established in 2018 by Kain Warwick and Justin Moses, the coin represents a synthetic asset that mirrors the value of the U.S dollar. It was created as part of a decentralized platform called Synthetix that is based on Ethereum's blockchain technology. The main purpose of SUSD is to track the value of USD and provide stability in the volatile crypto market.

Several prominent cryptocurrency exchanges like Binance, KuCoin, and Uniswap support the trading of SUSD. Moreover, given its Ethereum-based nature, SUSD can be stored in wallets compatible with Ethereum such as Metamask, Ledger Wallet, and Trezor. As part of the Synthetix ecosystem, SUSD plays a crucial role in facilitating transactions and offering a degree of stability for crypto enthusiasts and investors.

Pros and Cons

Pros of SUSD Token:

1. Stable Value Tied to the U.S. Dollar: SUSD mirrors the value of the U.S. dollar, which makes it a stablecoin. It is designed to maintain a 1:1 ratio with the USD, providing a stable value in the highly volatile cryptocurrency market. This stability is beneficial for traders and investors who want to avoid the price fluctuations common in other cryptocurrencies.

2. Tradeability on Major Crypto Exchanges: SUSD is supported by several prominent exchanges, including Binance, KuCoin, and Uniswap. This wide acceptance ensures easy liquidity and accessibility to users across various platforms.

3. Part of the Versatile Synthetix Ecosystem: SUSD plays an integral role in the Synthetix ecosystem, a leading decentralized platform for trading synthetic assets. This relationship enables users to leverage SUSD in various ways, such as trading other synthetic assets on the platform.

4. Compatibility with Commonly Used Crypto Wallets: As an Ethereum-based token, SUSD is compatible with most wallets that support Ethereum, including Metamask, Ledger Wallet, and Trezor. This feature promotes the accessibility and ease of use for SUSD token holders.

Cons of SUSD Token:

1. Dependence on Ethereum Network's Performance: SUSD relies heavily on the Ethereum blockchain. Consequently, any slowdown or congestion in the Ethereum network could impact transactions involving SUSD, potentially resulting in slow transaction times and high fees.

2. Potential Smart Contract Risks: Like other crypto assets based on smart contracts, SUSD faces potential risks if there are bugs or vulnerabilities in the contract. These risks could potentially lead to losses for SUSD holders.

3. Subject to Regulatory Uncertainties: Cryptocurrencies, including SUSD, operate in a largely unregulated market. Changes in crypto regulations or enforcement actions by governmental authorities could impact the usability and value of the token.

4. Imperfections in Pegging Mechanism May Affect Stability: Though SUSD is designed to match the USD, there might be discrepancies due to the pegging mechanism's limitations. These minor deviations could potentially influence the token's stability.

What Makes SUSD Unique？

The primary innovation of SUSD lies in its status as a synthetic asset in the cryptocurrency space. A synthetic asset is a type of asset which represents an underlying asset without the holder having to own the asset itself. In the case of SUSD, it mirrors the value of the U.S. dollar, making it a stablecoin. It was created as part of the Synthetix decentralized platform that allows users to bet on the prices of various assets without necessarily owning or handling the assets themselves, which is innovative in the decentralized finance (DeFi) market.

Another key differentiating factor is SUSD's integral role in the Synthetix ecosystem. Synthetix allows users to create and trade synthetic assets, and SUSD is used as the primary form of collateral in the network. This is in contrast to many other cryptocurrencies which serve as standalone coins or tokens, without a specific purpose beyond being a medium of exchange or a store of value.

However, it should be pointed out that while SUSD has these features, there are other cryptocurrencies that also function as stablecoins or serve specific purposes within a larger crypto ecosystem. As such, while these attributes can be considered innovative, they do not necessarily make SUSD completely unique in the world of cryptocurrencies.

How Does SUSD Work？

SUSD operates as a synthetic stablecoin within Synthetix, a decentralized finance platform on the Ethereum blockchain. It is designed to track the value of the US dollar, maintaining a stable 1:1 ratio.

Heres how it works:

1. Issue SUSD: Users can issue SUSD by staking SNX tokens, the native token of the Synthetix platform, as collateral. The number of SUSD that a user can create is determined by the collateralization ratio set by the system, which currently stands at 600%, meaning for every $600 worth of SNX tokens, you can mint $100 worth of SUSD.

2. Use SUSD: Once SUSD is minted, it can be used in various ways within the Synthetix ecosystem and wider DeFi space. This includes being traded for other synthetic assets (synths), used as collateral for loans, or exchanged to other cryptocurrencies on existing crypto exchanges.

3. Maintain Value: To maintain its peg to the USD, Synthetix uses a system of incentives and penalties. If the value of SUSD falls below $1, users are incentivized to buy SUSD and redeem it for $1 worth of other synths. On the other hand, if SUSD goes above $1, users are incentivized to mint more SUSD, increasing the supply and reducing the price back to $1.

4. Burn SUSD: When a user wants to unlock their staked SNX tokens, they need to burn the equivalent amount of SUSD they initially minted. This mechanism maintains the balance and ensures the total amount of SUSD in circulation has the necessary SNX collateral.

Please note that this whole process relies heavily on the Ethereum blockchain for smart contract functionality and transaction recording.

Circulation of SUSD

According to CoinMarketCap, the total circulating supply of SUSD as of September 26, 2023 is$40,114,070,757.

SUSD is a stablecoin, which means that it is designed to maintain a price of $1 USD. However, SUSD is not pegged to the dollar in the same way that traditional stablecoins like Tether (USDT) and USD Coin (USDC) are. SUSD is an algorithmic stablecoin, which means that it uses a complex algorithm to adjust its supply and demand in order to maintain its price.

Despite being an algorithmic stablecoin, SUSD has maintained a relatively stable price since its launch. In the past year, SUSD's price has ranged from a high of $1.05 to a low of $0.95.

Exchanges to Buy SUSD

Here are ten exchanges that support the purchase and trading of SUSD.

1. Binance: Supports SUSD trading with various pairs including BTC, ETH, and BNB.

2. KuCoin: Offers trading pairs of SUSD with BTC, ETH and USDT.

3. Uniswap: Primarily supports SUSD/ETH pair, but in the realm of decentralized exchanges, other token pairs can be created and provided with liquidity by users.

4. Curve Finance: Supports the exchange of SUSD with other stablecoins like DAI, USDT, and USDC.

5. Balancer: on Balancer, SUSD can be traded against multiple tokens including ETH, WBTC, and BAL. The specific pairs available depend on the liquidity provided by the community.

6. Sushiswap: Similar to Uniswap, it primarily supports trading with the pairing of SUSD/ETH among others.

7. 1inch: Being a decentralized exchange aggregator, it offers SUSD trading with various pairs, depending on the liquidity of the source exchanges.

8. Poloniex: Provides SUSD/USDT trading pair.

9. OKEx: supports trading of SUSD with pairs like BTC, ETH, and USDT.

10. Bittrex: Offers SUSD trading with pairs such as BTC, ETH, and USDT.

The availability of token or currency pairs depends on the individual exchanges and liquidity providers, thus, it may vary over time and should always be checked directly on the exchange platform.

How to Store SUSD？

SUSD can be stored in any wallet that supports Ethereum based tokens (ERC20 tokens), as it is built on the Ethereum blockchain. Here are a few wallet types that can be used to store SUSD:

1. Web Wallets: Wallets like Metamask and MyEtherWallet are browser-based wallets that can be accessed directly on the web. They are quite reliable for storing SUSD tokens and interacting with Ethereum-based applications.

2. Mobile Wallets: Popular mobile wallets like Trust Wallet or Coinbase Wallet support ERC20 tokens including SUSD. They offer convenience for users to manage their cryptocurrencies on their mobile devices.

3. Hardware Wallets: These are physical devices that securely hold your private keys offline. Ledger Wallet and Trezor are prime examples of hardware wallets. They are considered one of the safest options for storing cryptocurrencies, including SUSD tokens.

4. Desktop Wallets: These are software applications that are downloaded and installed onto a computer. Examples include Exodus or Atomic Wallet. They provide control over your private keys and thus are suitable for storing SUSD.

5. Paper Wallets: These are physical print-outs of both your public and private keys. They can be generated from certain websites, and provide an offline method of storing cryptocurrencies.

Remember, each wallet type has its own set of security measures and mechanisms, and it's crucial to consider these when storing any cryptocurrency, including SUSD. Always conduct your own due diligence when choosing a wallet for crypto storage.

Should You Buy SUSD？

SUSD is primarily suitable for those interested in the decentralized finance (DeFi) space, particularly users who want to engage in synthetic asset trading in the Synthetix ecosystem. It offers a stable asset in the largely volatile crypto market and can be used as collateral for minting various other synthetic tokens on Synthetix.

Here are some pieces of advice for individuals considering buying SUSD:

1. Understand the Synthetix Ecosystem: Before buying SUSD, individuals should understand the basics of the Synthetix platform, its model of collateralization, and the role SUSD plays within the ecosystem.

2. DeFi Experience: It's also crucial for buyers to have a fundamental understanding of DeFi protocols, as SUSD operates within this space. Familiarity with concepts like smart contracts, collateralization ratios, and staking rewards will make the experience smoother.

3. Evaluate Investment Strategy: SUSD, being a stablecoin, doesn't typically offer the same growth potential compared to other volatile cryptocurrencies. If potential large capital growth is an individual's primary objective, they might want to consider other cryptocurrencies. However, SUSD may be a good addition to diversify a portfolio and mitigate some risk associated with volatile cryptos.

4. Eth Consideration: Since SUSD operates on the Ethereum blockchain, the dynamics of Ethereum's network performance—such as transaction speed and gas fees—can impact the usability of SUSD. The buyer should consider this factor.

5. Wallets and Exchanges: Buyers should ensure they have the appropriate wallets that support Ethereum-based tokens, like Metamask, Ledger Wallet, and Trezor. They also need to explore which exchanges list SUSD.

6. Regulatory Awareness: In many jurisdictions, the regulatory stance on cryptocurrencies is uncertain or evolving. Any potential buyers should stay updated on regulations that could affect their ability to buy, sell, or use SUSD.

Remember, while these are general suggestions, cryptocurrency investments come with their own set of risks. Potential buyers should always conduct thorough research and consider their risk tolerance before investing. If necessary, consulting with a financial advisor may be advisable.

Conclusion

SUSD, short for Synthetic USD, is a unique stablecoin within the Synthetix DeFi ecosystem, designed to maintain a 1:1 ratio with the U.S. dollar. It provides stability in a notoriously volatile market and enables users to trade synthetic assets without owning the underlying assets. SUSD is supported by several prominent exchanges and is compatible with common Ethereum wallets.

The future prospects of SUSD largely depend on the growth and success of the Synthetix ecosystem and the wider adoption of stablecoins and DeFi protocols in the financial industry. As the ecosystem grows, demand for SUSD may increase as it is required for various functions within the network, such as trading other Synthetic assets.

As for making money or potential appreciation, it's important to note that SUSD is a stablecoin and is designed to maintain its value relative to the U.S. dollar, not to appreciate or depreciate in value. This is fundamentally different from other speculative cryptocurrencies that may appreciate (or depreciate) significantly.

Overall, SUSD's key role within Synthetix and its stability tied to the U.S. dollar give it a unique position in the world of cryptocurrencies. Before making investment decisions, it's essential for interested parties to conduct comprehensive research and consider the specific characteristics and purpose of SUSD.

FAQs

Q: Where can I trade SUSD？

A: SUSD can be traded on a number of cryptocurrency exchanges, including Binance, KuCoin, and Uniswap, among others.

Q: How is the value of SUSD maintained？

A: SUSD's value is preserved by a system of incentives and penalties within the Synthetix network to keep its price pegged to the USD.

Q: How does SUSD differ from other cryptocurrencies？

A: SUSD differentiates itself as a synthetic asset within the Synthetix ecosystem, serving a specific function beyond acting simply as a medium of exchange or store of value.

Q: Where can I store my SUSD？

A: SUSD, as an Ethereum-based token, can be kept in any wallet that offers support for ERC20 tokens, including desktop, mobile, web, hardware, and paper wallets.

Q: How is SUSD generated？

A: SUSD is minted within the Synthetix ecosystem by users staking SNX tokens as collateral.

Risk Warning

Investing in cryptocurrencies requires an understanding of potential risks, including unstable prices, security threats, and regulatory shifts. Thorough research and professional guidance are advised for any such investment activities, recognizing these mentioned risks are just part of a wider risk environment.