Introducing ETH as Margin on Synthetix

Multicollateral margin is now live on Synthetix and ETH is the first non-USDT asset you can post as collateral.

For the first time in the history of Ethereum, you can now utilize ETH as native collateral for trading perps on Ethereum Mainnet. Deposit ETH, trade any market, and manage everything from a unified multicollateral margin account, without ever touching your ETH stack.

On Synthetix, every trade lives and settles on Ethereum Mainnet, so it's only right that you can use the native asset as collateral. Here's what native ETH margin unlocks and how to start using it.

Trade Without Selling Your ETH

On Synthetix, you can now post ETH directly as collateral and maintain your exposure while you trade. Don’t give up a position on the asset you're most bullish on.

Your ETH backs your account, and your USDT-settled positions run on top of it. If you think in ETH, you can merge your conviction with your margin all without ever having to leave the L1.

Note: Minimum deposits, maximum account caps, and per-asset limits are shown in the deposit flow for each token. Larger caps and additional collateral types are coming soon.

Smarter, More Capital-Efficient Margin

Because all of your collateral lives in one unified multicollateral margin account, ETH and USDT work together. Your combined collateral backs every position.

A few of the ways to use it:

• Maintain exposure: Use ETH as margin when you'd rather maintain exposure to ETH instead of making deposits in stables.
• One account, every market: Your ETH and USDT collateral fund any USDT-settled market on the exchange.
• Avoid unnecessary selling: Trade perps without liquidating spot holdings, and the added taxable events that come with it.

More Efficient Basis Trades

ETH as multicollateral margin makes the bread and butter of DeFi strategies: Basis Trades,  seamless to run.

Deposit ETH as collateral and short ETH perps in equal size, and you've built a delta-neutral position: collateral value and position PnL move against each other and largely offset, reducing directional risk while you collect funding on the short.

Basis traders keep funding rates in line, so when they can run these positions more efficiently, every trader on the exchange benefits from tighter, more competitive markets.

How ETH as Margin Works on Synthetix

When you deposit ETH, it's valued using its live index price, minus a haircut, a standard risk discount applied to non-USDT collateral. 

The result is your Collateral Value: the amount of your ETH that actually counts toward margin. You can see this in your balance table at any time.

Because your positions settle in USDT, fees, funding, and PnL are still paid in USDT. If you're trading on ETH collateral without a USDT balance, your USDT can go negative while positions are open. This is intentional and is backed by your ETH.

You can repay it any time by using Swap to convert ETH into USDT directly inside your account.

Since ETH collateral is marked to its index price, a drop in the price of ETH lowers your margin even if your open positions haven't moved. 

Keep an eye on the collateral price, not just position PnL, and maintain a buffer. If USDT debt ever climbs past your account's allowed limit, the protocol can automatically convert some ETH to USDT to keep your account solvent, so it's worth repaying voluntarily before it gets there. Full details on haircuts, swaps, withdrawals, and account health live in the docs.

More Collateral Coming Soon

ETH is the first non-USDT collateral to be offered on Synthetix Perps, but it will not be the last. Our infrastructure is built to support additional assets as collateral in the future, and more collateral types, including yield-bearing assets, are on the way. 

This is just the beginning of a true multicollateral trading experience on Ethereum Mainnet.

Tapping into Billions

The opportunity for ETH as collateral on the only perp DEX built on Ethereum Mainnet cannot be overstated. Not only can Synthetix now seamlessly tap into well over $100 billion in idle ETH capital, but the upside of delivering a broad surface area of utility for ETH as an asset, natively on the Ethereum L1, is near-limitless in scope, especially when considering Synthetix's core composability with native DeFi on Ethereum.

It is an audacious goal, but if Synthetix can capture 10% of today's average monthly derivatives volume, it would kickstart a virtuous flywheel for the entire Ethereum ecosystem. 

This level of volume and trading activity would generate:

• $300-500 billion in monthly volume, all on the Ethereum L1.
• Increased fee revenue for all validators and protocols.
• Liquidity magnetism that siphons up any remaining capital on L2s and funnels it back to the L1.
• Innovation catalyst for new composable strategies on Mainnet. 
• Reunify DeFi around Ethereum's secure foundation. 

Every protocol benefits when the ecosystem is complete. The entire Ethereum DeFi stack becomes exponentially more valuable.

Trade with ETH Now

ETH margin is now live on Synthetix Perps.

You can also click the chat icon in the bottom-right corner of the docs site to speak directly with the Synthetix team.

Follow Synthetix as we make Ethereum Mainnet the premier venue for perps.