How is Juggernaut Different than other DeFi Synth Protocols?
Decentralized finance (DeFi) is a movement that is recreating traditional financial systems into newer, more inclusive and fair structures, with the use of automation, to bring open alternatives to every financial service we use every day (such as trading, insurance, loans, derivatives, etc.)
The objective is to allow everyone that couldn’t participate before in financial processes to participate, and to eliminate costly middlemen, making the services less time consuming, less expensive, and more collaborative.
The number of DeFi projects is growing, with the total of locked funds in DeFi protocols recently surpassing $7B.
Projects like MakerDAO (lock ETH or Ethereum-based assets as collateral to generate a stablecoin called DAI) have put DeFi on the spotlight, earning significant adoption, while others like Compound (lending and borrowing against collateral), Synthetix (issuance of synthetic assets with collateral) or Uniswap (decentralized exchange with liquidity pools and automated market-making) have explored many different use cases of the open finance (DeFi) movement.
Juggernaut (JGN) is building the next generation of DeFi infrastructure. With our modular approach and custom framework, we can help businesses launch their own DeFi capabilities. Imagine what could happen if entrepreneurs all around the globe did not have to rely on the old finance systems and instead could have fewer barriers to entry, more opportunities, and new business models to explore. They could create, deliver, and capture more value for everyone everywhere.
This blog post is focused on exploring the opportunities of JGN, as well as highlighting the main differences and unique points that the project has to offer when compared to other very important DeFi systems and protocols.
We have identified four major players in the synthetic asset space: Abra, Market Protocol, Synthetix, and UMA. This is what they offer and how we compare with them:
Abra is a decentralized platform focused on investing. Users can put cryptocurrencies as collateral to create synthetic assets. Abra uses crypto-collateralized contracts, similar to smart contracts, on BTC and LTC networks.
Abra is a very inclusive platform, and it can help onboard many new users into the crypto space. However, there’s no customization or programmability on their issuance of synthetic assets. They are focused on creating synthetic assets as a medium of investment and accessing them through a mobile wallet. Although we are dealing with the same type of asset, JGN’s approach is to use synthetics to create or launch new business models, while Abra’s approach is to reduce friction when buying, selling and holding other assets.
Market Protocol is a platform focused on trading. They have a framework to create Position Tokens (that act as derivatives) that track the price of any asset.
Market Protocol goes beyond investing, into trading. They provide the technology to create decentralized exchanges. Their focus is on giving you different trading options, such as shorting, hedging with a collateral pool, or trading with leverage. The similarities with JGN end in that we both issue non-commodity synthetics. Although they offer a degree of customization, it’s for a completely different use case. Their framework is for trading, while JGN’s framework is a modular approach to business. JGN helps you create customized synthetic derivatives that can have many different uses outside of trading, such as usage profit, incentivization of usage and adoption, or decentralized governance.
Synthetix is an issuance platform and exchange that lets users create a range of synthetic assets and trade them. They use their own token as collateral to create synthetics.
Synthetix is the closest platform to JGN in terms of functionality and approach. We both have collateral pools of our own token (JGN and SNX) and issue synthetic assets. One main point of difference is that Synthetix currently is not focused on non-commodity assets, which we are. They offer synthetics on fiat currencies, commodities (gold and silver), cryptocurrencies, inverse cryptocurrencies (short positions), and cryptocurrency indexes. Another distinction between the projects is that we offer more customization options when issuing synthetic assets, as our approach is to help businesses add DeFi capabilities to their existing models. Lastly, we have a custom framework with a modular approach, meaning we can focus on what’s best for a particular business or use case, adding and subtracting the pieces as it best suits any particular approach.
UMA is a decentralized protocol to enable the creation, maintenance, and settlement of financial contracts for any underlying assets.
UMA users can create financial products, using protocols such as ERC-20 to create tokenized derivatives that grant them exposure to real-world underlying assets similar to how traditional exchange-traded funds (ETFs) function. One of the main points of difference between UMA and JGN is that the former needs two parties involved, which need to lock some tokens to guarantee their future payments to the other party, while that’s not necessary on JGN. Another point of differentiation is that UMA synthetic derivatives have a fixed time, while on JGN, synthetic assets don’t expire (if you create a synthetic, it stays forever). UMA focuses on traditional financial concepts, such as long and short positions, or derivatives, while JGN hopes to bring new business models, as well as to add DeFi capabilities to existing traditional models. Lastly, JGN is trying to go beyond pure financial models. We believe DeFi has the potential to impact real-life financial use cases, altering the way we define value.
The following table compares JGN with the other four projects:
JGN will enable users to create, customize and modularize their business use cases into DeFi synthetics. With our modular approach and custom framework, we can help businesses launch their own DeFi capabilities.
Join the future of how we define and circulate value in the new DeFi paradigm with JGN.