Synapse is a cross-chain messaging system that lets anyone move assets across chains or provide liquidity (to earn bridging fees).

Cross Chain

Synapse

Protocol Code Quality

Protocol Maturity

Protocol Design

Risk Rating

yellow

Average

* [Documentation](https://docs.synapseprotocol.com/) 
 * Auditors 
 	* [CertiK](https://github.com/nerve-finance/contracts/blob/main/audits/Certik%20-%20REP-Nerve_Finance_Core_Contracts-06_04_2021.pdf) 
 * Please see our [FAQ on experienced auditors](https://help.exponential.fi/en/articles/6381015-what-are-experienced-auditors)

Exploit/Hacks

green

None

* [Website](https://synapseprotocol.com/)  
 * Token: SYN  
 * Tags: Cross Chain

Info

* TVL: $196M (Rank #37)  
 * TVL Ranking by Cross Chain: #2  
 * Blockchain: Ethereum, Arbitrum, Avalanche, Polygon, Binance, Metis, Fantom, Optimism, Harmony, Aurora, Boba, Klaytn, Moonriver, Cronos, Terra, Moonbeam  
 * Chain TVL  
 	* Ethereum: $58.72M  
 	* Arbitrum: $46.26M  
 	* Avalanche: $10.91M  
 	* Polygon: $5.73M  
 	* Binance: $4.45M  
 	* Others: $13.7M

Key Metrics

Information


- Code reviewed by at least one experienced auditor; [CertiK](https://github.com/nerve-finance/contracts/blob/main/audits/Certik%20-%20REP-Nerve_Finance_Core_Contracts-06_04_2021.pdf) audited in April 2021
- Public team promotes accountability
- No documented protocol hacks since launch


- Core protocol launched in 2021; maturity over 1 year reduces technical risk as smart contracts are moderately battle-tested
- Top 5% by total value locked reduces risk
- Decentralized governance increases transparency
- Moderate voting power concentration


- No concerns identified
- Optimistically verified bridge that uses honest watchers in the system to monitor and report frauds; optimistic bridges require only a single honest watcher to verify updates so an attacker can never be guaranteed to steal funds

Risk Assessment

Synapse is a cross-chain messaging system that allows any arbitrary data to be sent across chains in a secure and seamless way. It uses an optimistic security model to ensure integrity of these cross-chain messages.

What we like

Bridging fees on Synapse are often higher than competitor bridge protocols. Liquidity providers are heavily incentivized with inflationary SYN emissions.

What we like less

Synapse is one of the most widely integrated bridges that provides you seamless access to over 16 different blockchain networks.

What it means for you

Summary

#### How Synapse works
At its core, Synapse is a cross-chain messaging system that operates as an application layer. This serves as a base layer that seamlessly connects decentralized applicatoins (dApps) across blockchain networks. Synapse currently facilitates two methods of bridging: liquidity pools based on the automated market maker (AMM) model and canonical token briding with xAssets. The first dApp built on Synapse is the cross-chain AMM based on Curve's Stableswap model. For stablecoins, Synapse leverages its nUSD asset, which is a cross-chain stablecoin that is fully collateralized by assets (USDC, USDT and DAI) on Ethereum. The nUSD is paired with native assets on each chain to enable low slippage and fast settlement. When a user wants to bridge a stablecoin from one chain to another, the native stablecoin is swapped for nUSD on the source chain. The nUSD is then burned on the source chain while the same amount of nUSD is minted on the destination chain. Lastly, the nUSD on the destination chain is swapped for the native stablecoin. There are nUSD liquidity pools on both chains to enable these transfers; the users are incentivized to deposit stablecoins into these pools to earn bridging fees and protocol rewards. Synapse also uses xAssets for other assets which uses a more traditional lock-and-mint model. With xAssets, tokens are sent to a Synapse bridge contact on the source chain and a wrapped asset is minted on the destination chain.
#### How Synapse makes money
Synapse charges an admin fee on each asset swap. This fee can range from 0% to 100%, and is only applied on the fee paid for the swap, and impacts how much liqudity providers (LPs) earn from swaps in that particular pool. The Synapse bridge also charges a default bridge fee of 0.05% when assets are bridged across chains.
#### How you make money on Synapse
You can make money by depositing liquidity into nUSD and nETH pools to earn swap fees. In the future, you can also stake SYN to earn a portion of protocol rewards from swap and bridge fees.