Benefits / Problems Solved

Benefits / Problems Solved

Exposure - Synthetic assets enable an investor to track the price and have exposure to an asset, without having to hold the asset.

Accessibility / Global Universal Access - It allows anyone, anywhere in the world to have exposure to any asset like stocks, commodities or indices. For example, an investor in South Africa can be invested and have exposure to UK Real Estate, without having to purchase any UK Real Estate – via a synthetic UK Real Estate ETF tracker. Easier access to assets without discrimination on nationality or geographical boundary status.

Ease of Convenience - Less burdensome – An investor has less hurdles to overcome to have exposure to assets in various territories. For example, if an investor in Japan desired to have exposure to Indian stocks, in traditional finance - they would need to be a resident of India and also have a brokerage account that offers Indian assets. Outsiders would need to become a resident of India, setup a brokerage account in India and go through many auth stages before they can trade the asset.

With a synthetic asset, an investor in Japan can instantly get exposure to Indian stocks via buying a synthetic on the blockchain.

Novel Exposures – Synthetic assets can be created from any observable price feed. Enabling new and unique assets.

Assets become accessible for the unbanked – Synthetic assets require only a crypto wallet, expanding access to anyone free from discrimination. A user with no TradFi bank account, can own S&P500 styled shares.

Gateway to Automated Investing - Synthetic assets allow programmable portfolios which provide the gateway to automated investing. Envision an "Internet of Finance" with software bots handling investing tasks.

Anyone can participate in the market – Anyone can be a market maker and earn fees (by joining the debt pool) or a buyer (getting exposure to assets). There are no barriers to entry apart from capital itself.

Risk Management - Institutions and users can move funds between cryptocurrencies and synthetic assets (including synthetic FIAT) quickly and easily. Allowing for risk / volatility management. They can also use synthetic assets to hedge portfolios. They can use synthetic assets to bring down the asset correlations and standard deviations in their crypto portfolios.

Safe Haven / Long Term Returns / Retirement Portfolios – Users whom desire to achieve longer term gains from their crypto assets whilst still being exposed to crypto, can gain exposure to assets or baskets of assets that provide this. E.g. purchasing the S&P500 sySPY token for a buy and hold strategy. Anyone in the world can gain exposure to any geographical asset basket – for example a user in Venezuela can build their retirement off a US and European Portfolio without restrictions.

Individual Control – User can Manage their own financial universe with composable tools linked to synthetic assets.

Fractional ownership - Can gain exposure to expensive assets by acquiring fractions rather than whole units. Reimagining Ownership - Possess fractions of assets and new composites.