Synth lets users deposit collateral and generate synthetic assets which can potentially increase yield opportunities. This can result in high rewards but also can incur risks associated with standard lending protocols. Here’s everything you need to know before getting started with Synth:

Over-Collateralized

Synth is an over-collateralized protocol. Therefore users will need to deposit more collateral to stay “above water” if they are close to liquidation. This provides a buffer against potential price fluctuations and other risks, helping to reduce the likelihood of liquidations.

Monitor Health Factor

Due to the volatile nature of cryptocurrency, the collateral ratio can exceed the liquidation threshold unexpectedly. The user’s position may be partially or fully closed automatically in such cases.

To avoid liquidation, users can improve their health factor by adding more collateral or repaying some of the assets. The health factor, which reflects the ratio of collateral to synthetic assets, can be monitored at all times on the Metronome Synth dashboard.

Productive Collateral

Users who choose to use Vesper can simultaneously deposit their productive collateral into Synth, which will continue to passively compound yield in the same manner as before. As the protocol is decentralized and non-custodial, users retain control over their deposited collateral and synthetic assets. Funds can be withdrawn at any time, subject to the user’s outstanding position.

Reduced Features

Certain protocol features may be gradually introduced or temporarily unavailable during the beta period. This includes but is not limited to the following:

• A reduced selection of collateral and synthetics

• Lower collateral factors

• Reduced liquidity on open market synths

• Lower synth mintage caps

Metronome Support

Participating in synth generation through Metronome can be a valuable way to contribute to the protocol. However, it is essential to thoroughly understand the system’s mechanics before beginning. If you require assistance or have any remaining questions, we recommend joining the Metronome Discord and connecting with the team and community members. Additionally, you can stay informed on updates and developments by following Metronome on Twitter.