đ01. Ecosystem
The Solaris ecosystem consists of three core components: synthetic assets, staking, and exchange.
Synthetic assets serve as the center of the Solaris ecosystem, showcasing the achievements of DeFi innovation while building a bridge between blockchain and traditional financial products.
Staking is a key requirement for minting synthetic assets, as users need to stake mainstream assets to mint corresponding synthetic assets.
The Solaris exchange, as one of the primary venues for synthetic asset circulation, is an ideal platform for users to profit from or hedge risks using synthetic assets.
Synthetic Assets
Introduction
Solaris Network mints corresponding synthetic assets on the blockchain by simulating cryptocurrency, NFTs, and real-world financial assets-related products. Within Solaris Network, the risks or rewards of various on-chain and off-chain financial instruments can be simulated as their respective synthetic assets.
For example:
Synthetic assets of Bitcoin; Synthetic assets of NFT fragments; Synthetic assets of Tesla stocks...
Blockchain synthetic assets are financial instruments issued and circulated on the blockchain, composed of one or several assets (or derivatives). Corresponding to synthetic assets are the underlying assets. For instance, the US dollar is the underlying asset, while USDT and USDC are its synthetic assets on the blockchain. Bitcoin is the underlying asset, and WBTC is its synthetic asset on the Ethereum blockchain.
The significance of blockchain synthetic assets is that they provide more extensive application possibilities for underlying assets on the blockchain. For example, the US dollar synthetic asset USDT replaces the US dollar in exchanges and can be swapped with off-chain fiat currency, while another US dollar synthetic asset, USDC, participates in DeFi transactions. The Bitcoin synthetic asset WBTC can participate in the DEX ecosystem.
Solaris Network's synthetic assets cover the global financial ecosystem on and off the blockchain, providing investors with more diverse, convenient, and secure asset allocation strategies. As an advanced infrastructure based on Web 3.0, Solaris not only explores the unlimited potential of various assets in the DeFi field but also enhances the complexity and innovative attributes of asset allocation.
Categories
The synthetic assets of Solaris Network have names starting with "so". The "so" synthetic assets include, but are not limited to, the following categories and examples:
Cryptocurrency Synthetic Assets: soBTC, soETH, etc.
Cryptocurrency Inverse Assets: soiBTC, soiETH, etc. Synthetic Assets
On-chain Assets Crypto Indices: soDeFi, soMetaverse, etc.
Derivatives
NFT Assets
Synthetic Assets NFT Fragmented Assets
so Synthetic Assets
Forex: soUSD, soEUR, etc.
Basic Finance Commodities: soGold, soSilver, etc. Synthetic Assets
Off-chain Assets Stocks: soTSLA, soGOOG, etc. Derivatives Futures: soCrude Oil Futures, etc.
Derivative Finance Indices: soUSD Index; soNASDAQ, etc. Synthetic Assets
Leverage: NASDAQ 3x Long; NASDAQ 3x Short, etc.
Minting
Participants need to stake mainstream assets in order to mint sla synthetic assets. When minting "so" synthetic assets, users stake mainstream crypto assets, and mint sla synthetic assets according to the real-time price of the initial assets obtained by the oracle.
The calculation for minting synthetic assets is as follows:
đđđĨđ´đ = đđđĨđđ/đđ´
Here, maxAm represents the maximum number of synthetic assets that can be minted; PA represents price of the initial asset or related asset of the synthetic asset obtained from the oracle; maxVm represents the maximum value of synthetic assets that can be minted, and the specific calculation will be explained in the Staking section.
For example, if a user were to collateralize Bitcoin, with a maximum calculated mintable value of $4,500, and the oracle were to fetch the Tesla stock price at $180, then the user could mint up to 25 synthetic Tesla stock assets, denoted as soTSLA.
Use Cases
The "so" synthetic asset protocol establishes an efficient and practical value bridge between real- world finance and the cryptocurrency ecosystem. Both cryptocurrency investors and traditional financial traders have the opportunity to profit or reduce risk through 'so' synthetic assets.
"so" synthetic assets offer cryptocurrency investors a broader range of investment choices. For example, inverse crypto assets allow investors to short cryptocurrencies; index-based synthetic assets enable investors to focus on specific cryptocurrency sectors; NFT assets and fractionalized NFT assets solve the high price and liquidity issues of NFTs, allowing investors to profit from NFT asset price fluctuations with smaller capital scales.
"so" synthetic assets provide cryptocurrency enthusiasts with barrier-free investment opportunities in traditional financial assets. Without the need to register on a new platform, perform KYC, or transfer funds across borders, users can easily and conveniently invest in overseas stocks, stock index futures, crude oil futures, gold, foreign exchange, and other off- chain financial assets.
Traditional financial investors can use so synthetic assets for hedging. For example, if holding gold futures in the real-world financial market, one can choose to short "so" gold to hedge against short-term downside risks.
"so" synthetic assets can be added to the Solaris DEX for liquidity, earning dividends from the trading fees of the corresponding synthetic assets.
Advantages
Value protection: "so" synthetic assets are minted with the backing of mainstream asset value, using oracles to obtain the price of the underlying assets, ensuring the value of synthetic assets.
Diversification: "so" synthetic assets include blockchain-based synthetic assets of cryptocurrency derivatives and traditional financial products, providing investors with a comprehensive, one-stop decentralized investment platform for participation in both the on- chain ecosystem and traditional finance.
Cross-chain support: Solaris supports circulation on all mainstream public chains. With Solaris' outstanding cross-chain compatibility, it allows all public chains (including Binance Smart Chain, Ethereum, Polygon, Arbitrum, Optimism, Cosmos, etc.) to participate in the project services. Synthetic assets generated by Solaris can also circulate on various public chains, integrating with the existing ecosystems of mainstream Layer1 and Layer2 networks, creating a vast cross-chain synthetic asset financial ecosystem.
Decentralized, transparent, anonymous, and convenient: There are significant differences between trading traditional financial products and their corresponding synthetic assets. The latter eliminates centralized intervention by minting and trading synthetic assets on the blockchain, achieves on-chain data visibility, and allows for anonymous trading without the need for KYC, overcoming cross-border capital issues. This brings an unprecedented investment experience for traditional financial investors.
Prospects
The advancement of blockchain technology and the development of the Web3.0 ecosystem have driven the growth of demand for synthetic assets in the market. The number of Bitcoin's mainstream synthetic assets on Ethereum, WBTC, is on the rise. From September 2020 to the present, the number of WBTC has increased nearly threefold, reaching a peak of sixfold growth. With the development of the Web3.0 financial ecosystem, investors' demand for on- chain synthetic assets is showing a long-term growth trend.
Bitcoin Synthetic Asset - WBTC Quantity Change
350000
250000
200000
150000
100000
50000
In May 2022, the market value of WBTC as a percentage of BTC reached its highest level at 1.51%. In April 2022, the largest synthetic asset of Bitcoin on the BSC chain, BTCB, reached its highest market value as a percentage of BTC, accounting for 0.55%. With the addition of Ethereum, BSC, and other ecosystem chains' synthetic BTC, the current synthetic assets of BTC account for more than 2% of BTC's value.
As a decentralized, safer, and borderless innovative financial vehicle, blockchain's attention and applications are in the midst of a continuous growth wave, demonstrating its extraordinary potential and future value. From individual users to institutional investors, participating in blockchain finance will become a future trend. Assuming traditional financial products, such as gold, silver, crude oil futures, stocks, and foreign exchange, have only 1% demand for synthetic assets on the blockchain, this would constitute a huge market.
The size of the world's financial markets determines the space for synthetic assets. As one of the early ecosystems in the synthetic asset field, Solaris has enormous potential and room for development.
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