Ensuring the Integrity of Your Assets
One way Synthex manages risk is through its diverse pool of collateral assets. By allowing users to collateralize a variety of assets, Synthex reduces the market risk from just one asset. This helps to mitigate the impact of any price fluctuations in a single asset, spreading the risk across multiple assets.
Another risk management strategy employed by Synthex is the maximum cap on each collateral. This helps to reduce exposure by limiting the amount of any single collateral that can be used, thus reducing the potential impact of price fluctuations.
In addition, Synthex applies different loan-to-value (LTV) ratios for all collaterals and synthetic assets based on volatility. This ensures that the level of risk is commensurate with the volatility of the asset, and that users are not over-leveraged in any one asset.
To further distribute the risk of synthetic assets, Synthex has a variety of debt pools. This allows users to spread the risk of synthetic assets across different pools and to select pools that align with their risk tolerance.
Synthex is also partnered with ChainScore, an analytics firm that constantly monitors and simulates market risk. This allows us to have a better understanding of market conditions and to make more informed decisions about risk management.
Lastly, Synthex's governance allows for proposals for updating parameters, fees and access, which can be voted on by the community. This allows for an active management of the platform, providing a way to adapt to market conditions, and to be able to update the governance structure when needed. Overall, Synthex's diverse pool of collateral assets, maximum cap on each collateral, different LTV ratios, variety of debt pools, research partnership with ChainScore, and governance mechanism all contribute to the platform's robust risk management strategy.