Synapse

What is Synapse (SYN)?

Synapse is a universal interoperability protocol that enables secure cross-chain communication. It connects different blockchains by offering an extensible cross-chain messaging protocol that supports assets, smart contract calls, and more.

Using Synapse, blockchains can easily and securely interoperate, and developers can build cross-chain applications. These could include but aren’t limited to cross-chain exchanges, lending platforms, margining systems, derivatives markets, and yield aggregators.

When was Synapse Launched?

Synapse was launched in 2021, with the SYN token going live via the SYN/ETH liquidity pool on Sushi a day after its August 28th minting. The 29th also saw the Synapse Bridge being established between Ethereum, Avalanche, BNB Chain, and Polygon.

Before the year was out, Synapse also added bridging to Arbitrum, Fantom, Harmony, Boba, Moonriver, and Optimism. Many more were added in 2022, with 17 chains connected and 28 bridgeable tokens in all.

It only took two months for the Synapse Bridge to hit $1 billion in bridged volume, and the $10 billion mark was reached in May 2022.

How Does Synapse Work?

The Synapse protocol consists of a messaging framework and an economically secure method to reach consensus on the validity of cross-chain transactions. It provides an extensible set of smart contracts that can be deployed on any blockchain, and developers can leverage this to build truly native cross-chain decentralized applications (dApps).

Thanks to this generalized messaging system, arbitrary data can be sent across chains securely and seamlessly. Applications no longer need to be deployed separately across multiple chains; they can be deployed on a single chain and communicate with other chains to create the same user experience from one central application layer.

Generic message passing also includes smart contract calls, enabling smart contracts on different chains to interoperate easily. Simply put, this messaging system can act as a framework for universal blockchain composability.

Beyond messaging, another major element of Synapse is the Synapse Chain. An Ethereum-based optimistic rollup, Synapse Chain offers developers a generalized smart contract interface for building natively cross-chain use cases.

A sovereign chain with cross-chain messaging simplifies deployment and managing states across chains. It is also used to store attestations made by Synapse’s security system on the validity of cross-chain transactions.

What makes Synapse Unique?

The first application built using the Synapse protocol is the Synapse Bridge, which enables users to swap assets across the most widely used EVM (Ethereum Virtual Machine and non-EVM blockchains. However, out of all similar interoperability solutions, the Synapse bridge currently supports the deepest set of cross-chain liquidity.

When the Synapse network receives confirmation of on-chain events on a source chain, the requisite wrapped assets can be minted directly on the network. However, users often like to receive bridged assets native to another destination chain that is native to but distinct from the Synapse network. In these cases, the Synapse Automated Market Maker (AMM) executes transactions during the bridging process.

Synapse AMM liquidity pools employ a “stableswap” algorithm to price transactions and incentivize asset rebalancing through swapping and bridging. These pools are deployed on each chain Synapse is connected to, enabling rapid and trustless liquidity flows between all such chains.

This creates cross-chain dynamic pricing of all assets supported by Synapse based on fluid demand and makes the Synapse cross-chain AMM the engine behind its infrastructure.

Synapse Bridge can also be used by developers who want to integrate cross-chain asset swapping natively into their dApps. For example, the versatility of Synapse Bridge can be seen in its analytics, and as of February 2023, it had processed over $11 billion in total volume.

How is the Synapse Network Secured?

Security is a key part of the Synapse team’s vision, and it’s at the core of the protocol’s design decisions. Cross-chain transactions are validated by an optimistic verification system in which off-chain actors coordinate to identify malicious transactions and submit fraud-proof during a specified latency window.

In this Celo Optics-inspired optimistic model, the consensus scheme is referred to as “1 of N.” This means that the cost to attack the network is to co-opt all N number of network actors since just one honest actor is enough to detect malicious transactions. Still, this added security does have a trade-off in latency, with a window of time required for fraud identification.

Synapse’s optimistic verification mechanism requires four main off-chain actors:

• Notary. Signs merkle root on each supported chain and bond SYN behind attestations.
• Broadcaster. Forwards updates from home contracts to replica contracts.
• Guard. Observes cross-chain messages and submit fraud proofs when detecting malicious state updates.
• Executor. Posts the final transaction once the latency window is completed.

What is the Use of SYN?

SYN is the native token of the Synapse protocol and is primarily used in governance via the Synapse DAO. SYN holders of 50,000 or more SYN tokens can put forward proposals for the DAO to vote on, and the quorum is fixed at 10 million SYN.

The SYN token is also used as an incentive for liquidity providers and as the native token for transaction fees on the Synapse network.

How Much SYN is In Circulation?

The maximum supply of SYN is set at 250 million tokens, but according to Synapse, documentation can be changed through community discussion and an ensuing governance vote. Currently, over 139 million SYN tokens are in circulation.

How Do You Buy SYN?

You can buy SYN tokens on various exchanges, including a handful of top-tier centralized platforms. It’s also widely available on decentralized platforms. For example, on Ethereum, you can buy SYN using Sushi, Fraxswap, Cowswap, and Uniswap.

SYN is also available on several other DEXs on different blockchains, such as Solidly and Firebird on Fantom, Trader Joe on Avalanche, IDEX and Dystopia on Polygon, and PancakeSwap on BNB Chain.

How Do You Store SYN?

You can store SYN tokens in various wallets, depending on which DEX and blockchain you use to buy them. Metamask tends to be one of the most popular wallets for SYN and is compatible with most EVM chains with some tweaks to its settings.

Is SYN a Good Investment?

While the SYN token is theoretically used in the “Synapse DAO,” its utility is questionable since the restrictions in place mean only highly capitalized SYN holders can table proposals.

In addition, SYN token holders are not granted any decision-making rights over the business or ownership rights in any of the companies building the protocol, nor are they granted any right to claim profit distribution.

According to Synapse documentation, SYN was released via a fair launch and doesn’t have a single issuer. While that’s generally positive, the SYN token is fundamentally divorced from the protocol itself thanks to the aforementioned disclaimer and may well be a risky investment.