The Synapse Bridge is one of the most widely used interoperability solutions, but the magic behind it is its unique Synapse Cross-Chain AMM. This guide breaks down the core components: nUSD and the AMM logic.
Core Concept: The nUSD Hub-and-Spoke Model
Instead of creating fragmented liquidity pairs for every possible cross-chain swap, Synapse uses a canonical stablecoin, nUSD Synapse Stablecoin, as a universal settlement layer.
How it Works (A Swap from USDC on Arbitrum to GMX on Avalanche):
On Arbitrum (Source): The user's USDC is swapped for nUSD through a local AMM pool on Arbitrum.
Messaging: The Synapse messaging layer informs the destination chain (Avalanche) that a certain amount of nUSD is ready to be minted.
On Avalanche (Destination): The protocol mints the nUSD on Avalanche and then swaps it through a local nUSD/GMX pool to deliver the final asset to the user.
This hub-and-spoke model, powered by the cross-chain AMM, is the key to Synapse Interoperability.
A User's Guide: How to use Synapse Pools
Providing liquidity is straightforward.
Navigate to the Pools: Go to the official Synapse pools page.
Select a Pool: Choose a pool on a specific chain (e.g., the nUSD pool on Arbitrum). These pools contain nUSD paired with other stablecoins.
Deposit: Deposit one or more of the required stablecoins. You will receive an LP token in return.
Stake: Stake your LP token in the corresponding gauge to start earning Synapse LP Rewards.
By providing liquidity, you are powering the cross-chain AMM that makes the entire bridge possible. For a full breakdown of the AMM contracts, please refer to https://sites.google.com/verified-web3-portal.com/synapse-protocol/.
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