The Synthetix platform enables the creation of on-chain synthetic assets (Synths) that track the value of assets in the real world. Some examples of assets that the platform supports are synthetic fiat currencies (sUSD, sAUD, sKRW, etc.), synthetic commodities such as gold (sXAU), as well as more complex assets such as equity indices.

This overview will explain how the system enables the creation of these assets as well as some of the considerations in its design.

Synthetic assets allow you to receive the benefit of holding an asset without actually holding it. Before going any further, many people would want to stop you here and ask why. Why would you want to hold a synthetic asset instead of just holding the asset itself?

There are many answers to this question, but the fundamental reason people hold synthetic assets is that they receive some benefit over simply holding the underlying asset. The benefit could be access, such as in the case of gold where someone wants exposure to gold without having to deal with custody. It could be liquidity, where someone wants to be able to easily enter and exit a position that would be difficult to do with the underlying asset.

But in our case the answer is very simple, people will want to hold on-chain synthetic assets because they get the benefit of holding the underlying asset plus all of the advantages of a decentralised platform.

Synthetix

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#DERIVATIVES