SynFutures V2


SynFutures is a permissionless derivatives exchange that enables trading of any asset with a price feed.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
What we like
SynFutures enables leverage trading of nearly any asset with a reliable price feed due to its isolated pool design.
What we like less
The protocol is currently permissioned for select users. There is also currently a privileged role that plays a critical role in governing the protocol-wide operations.
What it means for you
Offers you a way to trade and earn yield on long-tail assets that otherwise would be not suitable for other decentralized perpetual exchanges.
Key Metrics
  • TVL: $6.3M (Rank #143)
  • TVL Ranking by Derivatives: #9
  • Blockchain: Polygon
  • Chain TVL
    • Polygon: $6.27M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; PeckShield audited in July 2022
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2023; maturity less than six months increases technical risk as smart contracts are less battle-tested
  • Top 20% by total value locked slightly reduces risk
  • Core contracts can be upgraded with just an EOA wallet
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • No governance token and/or contracts are fully immutable
Protocol Design
  • No death spiral concerns
  • Robust controls to mitigate oracle price manipulation
  • This protocol is susceptible to risks related to decentralized derivatives, such as LPs serving as the counterparty for all platform traders
Things to know about SynFutures V2

How SynFutures V2 works

SynFutures V2 is a permissionless platform for trading derivatives. Unlike traditional centralized exchanges which rely on order books filled by financial institutions, SynFutures uses a synthetic Automated Market Maker (sAMM). This means that traders interact directly with a pool, and there's no need for orders from other parties for trades to execute. Like other AMMs, liquidity providers (LPs) incur impermanent loss when the prices of asset pairs diverge. With the sAMM, liquidity providers (LPs) only need one asset, the margin token or the quote asset (i.e. USDC). Internally, the sAMM creates a long position using half of the added margin token to synthetically create a trading pair's base asset (i.e. ETH), and keeps the remaining half as available margin. At the same time, the sAMM creates a short position of the same size as the newly created long position for the trader. As such, the trader's total risk profile remains unchanged as the newly created long and short positions offset each other. After adding liquidity, the LPs also become traders due to their short hedging position and need to maintain sufficient margin in the account or risk being liquidated. SynFutures also allows users to list any asset pairs, enabling a wider range of tradable assets, from major crypto assets to long-tail assets and even some NFTs.

How SynFutures V2 manages risk

SynFutures V2 integrates a multitude of features to safeguard its user base and ensure system integrity. First, all liquidity pools on SynFutures are isolated from one another. This means an exploit for a certain trading pair will not have a follow-on impact on LPs in other pools. Another tool in its arsenal is the mark price algorithms. These algorithms employ mark prices to calculate both unrealized gains and losses and concurrently verify if individual accounts are meeting the required margin prerequisites. To further prevent oracle-related vulnerabilities like flash loan attacks, SynFutures aggregates prices from multiple spot DEXs into a Liquidity Weighted Average Price (LWAP). Additional protective measures include setting stringent limits on permissible price fluctuations per block and establishing a cap on the proportion of the market's open interest that any single user can control. This disperses risk and prevents overconcentration in a single entity. Lastly, SynFutures has designed a robust mechanism that employs an insurance fund to cover potential deficits. In the event the deficits are greater than the fund's reserves, the system has provisions in place to proportionally distribute losses among the position holders of the opposite direction.

How you make money on SynFutures V2

SynFutures V2 offers several options to earn yield. At its core, it remains a trading platform, and skilled traders can profit from market dynamics by buying and selling at opportune times. Users can also become liquidity providers by depositing their assets into the sAMM. In return, these LPs earn 5/6th of the trading fees generated for that trading pair on the platform. Beyond trading and liquidity provision, the platform also carves out roles for liquidators. These individuals are responsible for overseeing risky positions. Liquidators have the authority to liquidate traders’ positions if the margin falls short, and under specific scenarios, they can even take over a trader's position along with any remaining margin.