Discovering Synthereum: OCLR
We are thrilled to announce the launch of one of our most anticipated features: the On-Chain Liquidity Router (OCLR), often referred to as Atomic Swap.
OCLR empowers all the stakeholders (users, LPs, JRT holders, and partners such as wallets), and gives more utility to our synthetic fiat currencies (jFiat).
In short, OCLR leverages from the already existing liquidity of many DEXes allowing an exchange of any jFiat for virtually any other asset without the need for additional liquidity.
What is OCLR?
OCLR is fairly simple yet powerful. It combines two actions in a single transaction:
- First, a trade without slippage using the Synthereum Broker contract
- Then, a simple DEX swap
*To see how exactly broker contract operates, read the dedicated article:
Because the Broker contract allows for the exchange of jFIAT for USDC (and vice versa) without slippage, exchanging $100 worth of jEUR for wBTC has the same price impact as exchanging $100 worth USDC for wBTC.
Consequently, all the jFIAT have the same liquidity as USDC, and can be exchanged for virtually any token on any DEX from day one (provided that USDC is listed) and without the need for creating new liquidity pools or needing new liquidity providers.
Synthereum and OCLR
The OCLR provides a lot of value to the stakeholders of the protocol, the users, the liquidity providers, JRT holders, as well as partners.
Users
The possibility to trade an infinite amount of crypto/fiat trading pairs will be very convenient for people around the world who would like to trade BTC against their local currency. This will improve the overall user experience and adoption, as well as accounting and risk management.
Liquidity Providers
OCLR brings more volume and therefore fees to the LP, without increasing their risks.
In Synthetix, LPs are the counterparty to each trade (for a sEUR -> sBTC trade, the LP is now short on BTC); therefore, each new asset addition brings additional risks to the LPs.
In Synthereum, OCLR allows for the same trade (jEUR -> wBTC), but LPs are not short on BTC. In this specific case, LPs are short on USD and long on EUR. They only have to manage their Forex exposure, which is somehow quite easy to do. Therefore, adding new assets to the OCLR contract does not bring additional risks to the LP, only more volume.
OCLR brings more profits for the LP with no additional risk.
Protocol
Synthereum has enabled a Forex market on-chain. But trading volumes remain low since there is no leverage, a 0.2% fee, and a non-real-time price (not to mention the L1 gas fee). For now, the protocol has only been used to gain exposure to participate in our farming program or to conduct some arbitrages.
OCLR brings trading volume to the protocol without the need for synthetic crypto, bringing more fees, increasing the usabilities for the jFiat and the protocol, especially when launched on scaling solutions like Polygon. The fees generated by these volumes will go to the treasury which is managed by the JRT holders.
Partners
Synthereum is more focused on building the infrastructure upon which people can create new primitives, dApps, or be directly integrated into the UI.
If a wallet decides to integrate our broker contract together with our synthetic assets (with their own fiat on/offramp, or leverage from the existing one), it can provide its users with unlimited trading possibilities. The wallet itself can generate income, thanks to our revenue-sharing program.
A few wallets in Europe and India have shown their interest in our solution.
Closing thoughts
We are very excited about this upcoming release. This feature gets us closer to our initial vision outlined in the very first white paper in 2018: to create a fully interoperable market, where people would be able to exchange any assets, from Fiat to Crypto to Stocks etc.
What is next for OCLR
- Deployment on both the Ethereum Mainnet and on Polygon
- integration of other sources of liquidity
- Launch of an upgraded version that will be able to calculate the best route across various DEX
- Release of our SDK to allow anyone to build on top of it.
Pascal (pscltllrd on Twitter).
The possibilities are limitless
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