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Synapse Protocol Review
Swen Keller
- URL: https://www.synapseprotocol.com/
- Year Founded: 2019
- Native Token: Synapse Token (SYN)
- Supported Assets: 50+ including USDC, Unidex, Vesta, Pepe, Plutus, Chainlink token, Highstreet, Curve.fi USD, Ethereum, DAI, USDT, and Binance USD
- Supported Networks: Ethereum, Avalanche, BNB Chain, DFK Chain, Canton, Fantom, Klaytn, Aurora, Cronos, Harmony, Dogechain, Moonbeam and Moonriver, Arbitrum, Base, Optimism, Polygon, Boba Chain, and Metis
- Fees: Dynamic charges
Synapse Protocol Review: Our Take
Synapse is one of the top networks in blockchain interoperability with a daily transaction volume of more than $50 million and $500+ million in total asset value locked.
It stands out for supporting the creation of cross-chain applications and swapping.
However, Synapse supports a limited selection of networks and assets which will restrict its use for most people.
What is Synapse Bridge and How Does it Work?
The Synapse Bridge enables users to swap on-chain cryptocurrencies across 16+ EVM and non-EVM blockchains. Synapse Bridge supports Canonical Token Bridging (bridging wrapped assets across blockchains) and Liquidity-based Bridging (bridging native assets across cross-chain stable swap pools)
Simply put, Synapse Bridge was built as a solution to the problem of cross-chain interoperability by facilitating blockchain activities such as sending cross-chain messages, asset transfer, smart contract calls, swapping, etc. by enabling permissionless and decentralized transactions between L1 and L2 networks.
Using the Synapse Bridge, users can transfer assets from Avalanche, for example, to Polygon or Ethereum.
Synapse Bridge also allows developers to create cross-chain applications that support cross-chain asset swapping natively.
By leveraging the Synapse Bridge developers can create DeFi cross-chain applications such as lending platforms, cross-chain DEX, derivatives markets, yield aggregators, margining systems, and much more.
Concerning how it works, the Synapse protocol uses a cross-chain AMM (Automated Market Maker) system that converts tokens from one blockchain to the native assets of the destination chain using stable swap algorithms which helps in determining the exchange price for tokens within the cross-chain liquidity pools.
The system enables seamless asset transfer between different ecosystems without the constraints of losses and inefficiencies.
Pros
- Easy to use
- Supports the creation of applications
- It has never been hacked
Cons
- Supported networks are limited
Unique Features
Synapse Chain Explorer
The Synapse Chain Explorer is a generic event indexer for all Synapse Bridge events.
It is paired with a smooth user interface which gives users a comprehensive overview of every transaction that passes through the Synapse Bridge.
As an advanced bridge explorer, Synapse Explorer uses a suite of built-in data indexing and analytics tools and enables you to view in real-time all relevant information related to bridging transactions, cross-chain messaging, and general analytics.
The transaction data displayed by the Synapse Explorer is extremely legible and can be parsed by token, chain, address, etc.
Also, the information is stored in an API, which means that anyone can access it and run their analytics on it.
Aside from the importance of the Synapse Explorer to users and its use in tracking and monitoring activity on any bridge including information on bridge status and transaction, the Synapse Explorer is also useful to developers.
The Synapse team and developers can use Synapse Explorer for debugging and troubleshooting problems with the Synapse Bridge and any application built on it.
Also, the ability of the Synapse Explorer to gather data and every cross-chain message transmitted on the Synapse Bridge enables developers to have useful insight into the behavior of users.
This can help developers know how satisfied users are with their applications, identify areas that need improvement, and improve the user experience by making their applications more effective.
The Synapse Explorer has several tools that help you easily access whatever information you are looking for.
It has a search bar where you can filter transaction searches by token, address, chain, etc. access more advanced analysis, track the status of your transaction, and monitor recent activities.
It gives you access to Analytics Views segmented by origin chain, destination chain, address, and tokens.
These views give you access to advanced volume metrics, total transactions, and user metrics.
That said, the Synapse Explorer is made up of and supported by an advanced data indexing suite that is responsible for the support of several operations.
Below are the components of the Synapse Chain Explorer Analytics Suite. Synapse Chain intends to make these tools open source soon so that developers can use them for their use cases.
- OmniRPC: This is an RPC aggregator used to interface across the chains supported by Synapse. The number of confirmations required across RPCs to produce a valid result is configurable, this ensures data integrity.
- Scribe: This tool indexes and stores Receipts, Logs, Transactions, and Blockheader data for over 860 contracts across 18 chains. The Scribe is secure as it was built with a record protection mechanism to protect data integrity.
- Explorer: The Explorer is responsible for parsing raw data from events emitted by Synapse contracts across all platforms this includes historical token data, maturing data with historical prices, etc.
Cryptocurrencies Available on Synapse Protocol
The Synapse Protocol supports about 50+ cryptocurrencies.
Supported cryptocurrencies include Ethereum, Wrapped Bitcoin, USD Coin, Tether, Chainlink, HighStreet, Vesta, Synapse Token, DAI, Angel Euro, Olympus DAO, New Order, and Frax.
Networks Available on Synapse Protocol
The synapse bridge currently supports 19 Layer 1 and Layer 2 networks. Below are the supported blockchain networks on both layers.
Layer 1: Ethereum, Avalanche, BNB Chain, DFK Chain, Canton, Fantom, Klaytn, Aurora, Cronos, Harmony, Dogechain, Moonbeam, and Moonriver.
Layer 2: Arbitrum, Base, Optimism, Polygon, Boba Chain, and Metis.
Synapse Protocol Fees
The fee structure for using the cross-bridge solution, Synapse, varies based on factors like the blockchain networks you want to transfer across, the congestion of the blockchain network, and the cryptocurrencies being transferred cross-chain.
That said, here are the fees you’ll have to pay when trading on Synapse
Note that most of these fees are dynamic and aren’t fixed:
Synapse Service Charge: Synapse charges a fee for facilitating cross-chain transfers. The service fee is a percentage of the entire asset amount that you’re transferring and its purpose is to maintain the Synapse chain and ecosystem.
Additional Costs: At times, you may have to pay extra charges like arbitrage costs and slippage fees, especially on transactions that involve complex smart contract communication or instant decentralized exchange trades.
Blockchain Network Fees: For cross-chain transactions both the source and destination chain will charge individual blockchain fees, which are also called gas fees on Ethereum networks. These fees are necessary to process all transactions on every supported chain.
Liquidity Provider Costs: If your asset swap involves a transfer between different asset types, a fee can be charged by the liquidity provider to facilitate the swap.
All these fees fluctuate depending on the current state of the market, so you’ll need to check them before finalizing a transaction.
Is Synapse Protocol Safe?
From our direct engagement with this protocol, we’ve ascertained that it is safe to use.
Synapse is one of the most secure and truth-worthy crypto bridges in the industry. It has never been exploited or hacked.
The Synapse Chain uses a security model that involves Guards and Notaries who are required to stake bonds.
Notaries are required to stake a huge amount of bond, this is meant to deter them from engaging in fraudulent activities and also incentivize destination chain guards to promptly report any discrepancies.
With bonded actors in the system continuously monitoring the platform for malicious behavior or fraud, the overall security of the system is ensured.
Also, the protocol uses a decentralized governance model through the DAO. The governance structure ensures that no change is made to the protocol without rigorous scrutiny and voting by the DAO.
This provides community oversight and an extra layer of security to the protocol.
Staking Rewards
The Synapse Protocol supports the staking of its native token, SYN token in exchange for governance rewards.
Users that stake the SYN token can vote on Synapse Protocol ecosystem direction as well as earn up to 79% APY.
To be eligible to start staking on the Synapse Protocol you need to have a minimum of 1,000 SYN tokens.
The Synapse network also offers liquidity pools that reward contributors for rebalancing. Some liquidity pools like Metis nUSDLP offer up to 18.5% APY.
SYN Token
SYN is the governance and utility token of the Synapse Protocol.
It is an Ethereum-based token and powers the Synapse Protocol for bridging and swapping assets across chains, earning yields, etc.
Primary use cases of the Synapse Token include staking, gas fees and protocol fees, rewards, and governance of the Synapse DAO.
For example, users are incentivized with the Synapse Token to exhibit good behavior like liquidity provision, governance participation, and maintaining high-quality data.
Also, the SYN token is used to provide economic security to the Synapse chain like any Proof of Stake blockchain.
As the governance token of the protocol, SYN token holders who hold it have voting powers.
Active stakeholders and liquidity providers are responsible for the governance of the protocol and get to discuss and vote on important issues about both the present and future of the protocol.
Aside from governance, the SYN Token is also used to pay protocol fees on the Synapse chain.
The base network swap fee is paid in SYN.
The token serves as a liquidity incentive. Liquidity providers are rewarded with SYN for their contributions to Synapse.
The Synapse Protocol intends to develop its Proof of Stake blockchain known as Synapse Chain where validators who want to help secure the network can stake SYN.
SYN has a total supply of 250,000,000 SYN and a circulating supply of 190,117,588 SYN.
The total market capitalization of Synapse (SYN) is $80,029,767 as of December 2023.
Below is a breakdown of the initial allocation of SYN Token:
- SYN Genesis Airdrop: 62%
- Future Distribution: 26.8%
- Prior Distribution to Liquidity Providers: 7.8%
- Synapse Protocol Owned Liquidity: 2.2%
- SynapseDAO Loan to Market Makers: 1.2%
That said, Synapse began as Nerve on the Binance Chain but the token was migrated from NRV to SYN in 2021 at a rate of 1 NRV = 2.5 SYN.
Drawing upon our practical trials with this crypto bridge, we noticed that Synapse releases new tokens weekly as rewards.
At the time of writing approximately 197,400 SYN are released weekly.
This means that the total supply call of 250M will have been issued by January 2025.
Below is the breakdown of its emissions every week.
ETH Pools
- 5,040- nETH pool on Optimism
- 10,080 – nETH pool on Avalanche
- 13,305 – nETH pool on Arbitrum
- Other: 59,038 – SYN/ETH Sushi LP on Ethereum
Stable Pools
- 7,056 – nUSD pool on Optimism
- 15,120 – nUSD pool on Polygon
- 15,875 – nUSD pool on Fantom
- 20,160 – nUSD pool on Avalanche
- 17,388 – nUSD pool on BSC
- 19,958 – nUSD pool on Arbitrum
Total: 197,400 per week for a ~5.4% annual inflation.
SYN tokens are traded in centralized crypto exchanges against several currencies with the most active trading pair being SYN/USDT. The token can be purchased on exchanges like Binance and Gate.io.
You can also add the token to the MetaMask wallet. Adding SYN to MetaMask allows you to easily view your token holdings and trade on decentralized exchanges.
Adding SYN to your MetaMask wallet is easy, all you need to do is to import SYN as a token. You can do this by copying the contract address for the token and importing it manually.
Alternatively, if you have the MetaMask Chrome extension installed, you can simply add SYN with one click using a platform like CoinGecko.
Things We Do Not Like about the Synapse Network Bridge
Leveraging our expertise in cross bridges solutions we found that the primary con of the Synapse network bridge is its support for a limited selection of blockchain networks and assets in comparison to other similar bridges.
Final Thoughts
The Synapse network remains one of the strongest forces in driving blockchain interoperability offering cross-chain messages and transactions via the Synapse Bridge. With the support of Layer 1 and Layer 2 blockchain networks, Synapse is succeeding in connecting previously individual blockchains.
With Synapse Chain, the protocol will push its objective more by making transactions more secure and efficient through optimistic rollups.
That said, Synapse falls short in supported blockchains and assets as it offers a limited number of both. This puts a restriction on the type of Synapse users that will want to use the protocol.
Synapse Protocol is a popular choice, but exploring more is key. Check out our Binance Bridge Review for another top option.
FAQ
Most frequent questions and answers
Synapse network is a secure centralized bridge and it has never been hacked or experienced a cyber attack.
The protocol is secured by four off-chain actors in Synapse’s optimistic verification mechanism. These are the notary, broadcaster, guard, and executor.
The Synapse network validators have been lauded for being able to identify unusual activity on the network in the Automated market Maker Metapools and stop fraudulent transactions in their tracks.
In its closest hacking incident which was a fraudulent transaction, the Synapse team stated that validators would mint nUSD back to all affected Avalanche LPs no funds would be lost and the Avalanche nUSD LPs fully restored.
Plus, after a full audit of the fraud transaction, the money from the rejected transaction was used to pay the affected liquidity providers.
So the Synapse network has never been hacked or exploited successfully since its launch in 2019.
Yes, the Synapse is fully decentralized with SYN staking Synapse users being able to participate and vote in the governance DAO on important network decisions.
The Synapse token is the utility token of the Synapse protocol, an interoperability solution built for sending assets across blockchains. It enables its users to transfer and swap their assets across different blockchains including Layer 1 and Layer 2 as well as sidechain ecosystems.
With the Synapse token users can participate in governance of the network.
Yes, the Synapse Protocol is a legit cross-bridge solution founded in 2019. The protocol has had no successful hacking incidents since its launch and is arguably the most widely used cross-chain bridge for cross-chain communication.
We always try to provide the most accurate information available, and make sure our team follow through.
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