Synthetix Perps Engine

TLX leveraged tokens are backed by perpetual futures on Synthetix

TLX creates leveraged tokens by consolidating them based on asset, direction, and leverage (e.g., 10x long ETH) and backing them with a corresponding single perpetual futures contract using the Synthetix protocol's Perps V2 engine. This position is continuously adjusted to account for price movements that trigger a rebalancing event or user interaction such as minting and redeeming leveraged tokens.

Fig. 1. Relationship between leveraged tokens and perpetual futures.

Integrating the Synthetix Perps V2 engine allows TLX users to gain synthetic exposure to the underlying asset, i.e. without holding the actual asset. A user's margin is denominated in sUSD and the counterparty to all leveraged tokens minted on TLX is the SNX debt pool. The Synthetix Perps V2 engine also enables TLX to leverage Pyth Data to ensure users' trades are executed based on precise and timely data. This secure design reinforces the platform's reliability for mission-critical operations for leveraged trading.

For more information regarding the Synthetix protocol's Perps V2 engine, please consult their official documentation: https://docs.synthetix.io/synthetix-protocol/readme