Synthetix (Ethereum) DAPP (Part 05)
Synthetix is a very successful DApp in the DeFi world that I talked about in the last 4 posts on this topic. But despite its success, Synthetix experienced some challenges in its journey. A project may be very good but still, it may have some limitations and challenges. I want to share some of the challenges in this post so that they can be addressed. The most important and influential challenge is scalability. Most of the Ethereum blockchain-based projects have struggled with high gas fees and network congestion.
As this is based on the ETH blockchain so it is also struggling with high gas well. This is a hindrance in trading on the platform, which is expensive and slow. To address these issues, Synthetix has explored various scaling solutions like layer 2 technologies like Optimistic Rollups. In that way, the transaction cost has been reduced and the platform’s efficiency has been improved with higher number of trading with low gas fees. Another problem is with Oracle. If an oracle provides incorrect or outdated price information, it could damage a lot as the users will lose their Funds.
To mitigate this risk, Synthetix has implemented redundancy measures like using multiple oracles and implementing fail-safes to ensure the accuracy of price feeds. Synthetix has plans to explore the possibility of launching synthetic indices. So users will have their opportunity on a basket of assets and that will help them to diversify their assets. Finally, I should say that the Synthetix platform (DApp) has opened up new possibilities for decentralized finance and expanded the reach of the DeFi.
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VEIGO (Community Mod)
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