Existing platforms to trade Synths on chain do exist within DeFi, but as mentioned previously, are primordial and thus grossly lacking in terms of realising the full potential of the synthetics market.
The Synthr Ecosystem
1) Minting of syAssets (Borrowing)
Users put up an asset as collateral to mint a new synthetic asset (syAsset), and a decentralized oracle feeder provides the asset value information. syAsset will be minted according to the pledge rate (loan-to-value ratio) of different assets.
For example, if you want to mint Tesla stock:
Deposit $1,500 in stablecoin (or any other supported asset such as synthetic assets) into a smart contract (Collateralized Debt Position, CDP) as collateral.
According to collateral parameters, if you put stablecoins as collateral, you will be required to put a minimum of 150% of the minted asset’s value. This means you will receive $1000 worth of syTSLA in return. If you were to choose another synth as collateral, you’d be required to put 200% of the minted asset’s value.
To reclaim collateral, repay shares of syTSLA and get back the locked stablecoin.
2) Trading and Farming of syAssets
At Synthr, syAssets are traded against stablecoins facilitated by AMMs (automated market makers). For example, trading against syXAG/UST pool on Uniswap would be the easiest way for a trader to get access to XAG.
Farming syAssets is related to liquidity provision, short position creation, and earning LP and syLP token staking rewards.
In order to create a short position, users need to lock collateral assets to Synthr, and mint new syAssets. Unlike borrowing, newly minted assets are immediately sold. Users can long farm and short farm.
To ensure liquidity, Synthr incentivizes farmers and liquidity providers by sharing:
• Trading Fees: All syAsset trades are generated through the AMM are levied a commission to the liquidity provider of that specific syAsset.
• The Synthr native token: The native token is utilized for incentivizing syAsset liquidity providers. In addition to providing liquidity incentives, the Synthr token $SYNTH plays a vital role in the governance of the protocol. Users can lock their $SYNTH to obtain veSytnh, granting them governance rights, boosted staking rewards, and rebates for allocating % of rewards from the annual reward pool.
3) Yield Optimizer (SynthVaults)
Allows yield farming on synthetic assets powered by an auto yield optimizer. To increase capital efficiency, part of the user’s collateral will be injected into credible third-party interest-bearing protocols
4) Social Trading
Allows building, scaling, and monetizing investment strategies. A list of profitable investment strategies will be available for users to apply themselves. Regardless of experience level, any investor can access expert-level strategies.
5) Liquidation as a Service (LaaS)
The P2P liquidation queue allows users to bid to buy liquidated collateral at a discounted price. Removing the need for technical knowledge.
$SYNTH Token
$SYNTH will be a deflationary token, ensuring its supply reduces over time whereas demand increases with increased protocol usage.
By incentivizing users to lock up the circulating supply, we will ensure the demand for $SYNTH will increase and exceed the supply.
Revenue Generation
- Transaction fees earned in $USN on every Buy & Sell transaction
- Transaction fees earned while borrowing with collateral
- Fee earned while putting liquidity in Long Farms
- Fee earned while closing a short position will be credited to stakers’ wallets.
Governance
$SYNTH owners will be given the option to lock up their tokens to obtain veSynth to vote on polls and create new polls as mentioned above.
Voting
Users with a staked $SYNTH position can vote on polls. Each user receives voting power weighted by their amount of staked $SYNTH and the duration of lock up.
Creating Pools
Users with staked $SYNTH positions can also create new polls by paying an initial deposit of SYNTH tokens. Governance proposals can be made to initiate voting for the listing of new assets, reward distribution, or parameter modifications.
To new horizons
Asset tokenization on the blockchain has the potential to break down the financial and geographic barriers that hold back traditional asset classes from global accessibility. While there have been attempts to perfect synthetic asset trading, this new market still lacks an all-around platform that has ironed out its wrinkles.
To release the full potential of the synthetic assets, our founding team of seasoned DeFi and TradFi experts joined forces and laid the foundations of a new, better, and bolder synths platform that addresses all the pitfalls in the current synth market. And after years of research and development, Synthr is ready to disrupt on chain derivatives trading for good.
Stay tuned to watch us do so.
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