What are synthetic assets?
Synthetic assets are combinations of assets that has the same effect and value from another underlying asset or index. This innovative tool provides many people with the opportunity to invest by diversifying their portfolio.
In the traditional system, different financial instruments stocks, bonds, currencies and gems are the assets which are the bases for the traditional financial derivatives. With synthetic assets, there is no need to hold these assets itself in one’s portfolio. The assets are only traded with their representative which is a token.
Synthetic assets are blockchain-based cryptocurrency derivatives that ‘derives’ their value from an underlying asset or index. The correlation between these synthetic assets and their underlying assets is a token.
What is Synthetify?
Synthetify is a DeFi application built on top of the Solana blockchain that can be used to create, exchange and burn synthetic assets. With many features built in the app, users are provided with different features that enables them make investments using the synthetic assets made available. An example of this is a quick swap used to exchange different synthetic assets on the platform with a fixed fee of 0.3% which is low. Another
The Synthetify app has uses its SNY token that is native to the platform for collateral. This helps them to easily create, exchange and burn synthetic assets that were created.
By doing so, users can get exposure to different assets within the Solana ecosystem.
Advantages of Synthetify
Because Synthetify is built on Solana, it has a lot of advantages over the Synthetic Assets platforms that are available on other blockchains. For example:
- Transaction Fees: Synthetify fees are relatively zero because the average fee for any transaction on Solana is $0.0001.
- Number of transactions per second on Synthetify can be easily accommodated because Solana can process 50,000 transactions per second.
Notable Features on Synthetify
Synthetify has five major features which are Staking, Exchange, Vault, Swapline and Statistics. Let’s take a look at those features.
This is a process whereby a user deposits some amount of SNY tokens and gets an eligibility to borrow some other assets from the pool of assets available.
In this section, you can easily exchange (commonly called “Swap”) a synthetic asset for another one. An example here is me trying to swap xBTC to xSOL from the Synthetify App.
This section is where a user can borrow a synthetic asset by depositing an asset that they have as the collateral for the loan. The total amount you are depositing as collateral corresponds to the magnitude of the amount you can borrow.
The Swapline exists to help you swap tokens with the price in which these assets and tokens are worth. It helps in the preventions of steep price slippages.
- This page shows you a visual representation of some of the activities on the Synthetify protocol. From total Collateral amount (the value of Collaterals deposited in the protocol is above $32,000,000), the total debt, fees etc. can be seen
The following are the utilities of the Synthetify Token ($SNY):
- As Collateral: In the creation of Synthetic Assets, SNY can be used as the collateral needed.
- Holding SNY guarantees the reduction of swapping fees required to perform a swap.
- Later on, SNY will be used to vote in governance decisions that will direct the synthetic asset platforms.
Token Allocation (SNY)
The Synthetify token, denoted as SNY has a total supply of 100,000,000 and is distributed as follows:
- Ecosystem Reserve – 30%
- Ecosystem Incentivized Fund – 20%
- Team – 20%
- Synthetify Debt Pool – 10%
- Liquidity Mining – 10.6%
- Private Sale – 6%
- Exchange Liquidity – 2.4%
- IEO/IDO – 1%
The Synthetify team consists of blockchain developers with much experience in building reliable blockchain-based system. The founder and lead developer of the Synthetify project is Nobert Bodziony.