It's described here: https://docs.synthetix.io/litepaper https://docs.synthetix.io/litepaper Some users, called stakers, put up collateral, and in return the c

It's described here: https://docs.synthetix.io/litepaper https://docs.synthetix.io/litepaper Some users, called stakers, put up collateral, and in return the contract mints a synthetic asset. Stakers can destroy ("burn") the synthetic asset to unlock their collateral. The exchange rate is based on price feeds that oracles publish to the blockchain. There is an incentive for stakers to mint or burn the synthetic asset until its price matches the one published by the oracle.