Synthetix Announce Partnership With dHEDGE

Synthetix has partnered with dHEDGE to deploy a one-click debt mirror index for SNX stakers on mainnet Ethereum. With this tool, each staker can hedge their exposure to the debt pool.

Partnership Highlights

• dHEDGE tool that helps automate SNX stakers’ debt management by automatically mirroring debt pool
• To activate it, a staker needs to purchase a debt mirror index token (dSNX)
• Currently available on L1 Ethereum
• In the future, it is planned to be built on L2 Optimistic Ethereum

SNX stakers are exposed to the price fluctuations of all outstanding synths and have the challenge of hedging their exposure to the debt pool. To hedge this exposure, stakers need to replicate the debt pool by buying (or shorting if required) the underlying assets of outstanding synths (e.g. if debt pool is 50%sUSD & 50%sETH, if one wants to be hedged, he/she would need to hold 50%USD & 50%ETH). This is an expensive and tedious process that requires ongoing management.

The dHEDGE team has introduced a simple one-click solution that handles debt hedging by automatically replicating the global debt pool. To activate it, a staker needs to purchase dSNX tokens to automatically hedge their debt.

All a staker must do is navigate to the Synthetix Staking website’s debt section and purchase the dSNX token through the UI which is integrated into the ‘Manage Tab’. 1 sUSD worth of debt mirror token will hedge one sUSD worth of debt.

The Debt Mirror Index in the Backend

Things are a bit more complex in the backend. While purchasing the debt mirror token is done on layer one Ethereum through a Uniswap V3 pool, the pool containing the assets that replicate the debt pool exists in Polygon. Users do NOT have to do anything in Polygon; all interactions for the user are handled on Layer 1 Ethereum.

This index token gets continuously rebalanced to hold the assets that comprise the debt pool, including borrowing and shorting via AAVE any % required by the debt pool. A redeemable token is then ported to mainnet Ethereum, which enables a single token debt hedging solution.

ABOUT Synthetix
Synthetix is a new financial primitive enabling the creation of synthetic assets, offering unique derivatives and exposure to real-world assets on the blockchain.

ABOUT dHEDGE
​dHEDGE is a one-stop location for managing investment activities on-chain where you can put your capital to work in different strategies based on a transparent track record.

RESOURCES
Synthetix Blog