πŸ§šβ€β™‚οΈSynths Overview

Synths are tokenized asset management strategies that can be used directly and composed into new assets that automatically minimize losses and maximize yields.

Automated Asset Management

Umoja revolutionizes asset management through a systematic approach:

  1. Identification: It begins by pinpointing basic trading and DeFi strategies that the community has proposed and researched.

  2. Automation: These strategies are then automated to streamline their execution.

  3. Tokenization: Finally, the strategies are tokenized, making them easily integratable with other assets for enhanced composability.

Synths, or 'synthetics', are specialized tokens that replicate the functions of traditional financial instruments and DeFi strategies. They do this by participating in derivatives trading on centralized exchanges and carrying out operations within well-known DeFi protocols.

Unlike asset management protocols like Yield or dHedge, which primarily launch specialized investment strategy vaults aimed at yield optimization, Umoja's goal is broader. We aim to assemble a versatile library of asset management strategies. These strategies are designed to mitigate market risks and enhance yields, and they can be accessed directly through the dApp or indirectly via assets embedded with a Synth.

Synths are backed by user funds, ensuring that users are only impacted by the performance of the specific Synths they engage with, based on their own collateral. This method guarantees a personalized and risk-mitigated investment experience.

Using Synths Directly

Synths can be used directly via the Umoja dApp interface for users that want to achieve a certain asset management objective or strategy without dealing with the risks and complexity of traditional crypto derivatives markets like Deribit.

For instance, users can engage with synthetic versions of protective strategies (put options) and growth strategies (call options) for Bitcoin and Ethereum. This approach provides a safety net against financial losses (zero-liquidation risk), offers 30 times more trading capacity compared to traditional markets, and allows for much greater flexibility in setting contract terms and price targets.

Composing New Assets

For developers aiming to create innovative financial assets (also known as Smart Money), we will soon provide a toolkit (SDK/API) that allows for incorporating Synthsβ€”our specialized financial toolsβ€” into smart contracts with existing assets. This will enable the creation of:

  1. High-Yield Synthetic Stablecoins - Digital currencies designed to keep a stable value while offering higher returns than typical stablecoins.

  2. Hedged Assets - Investments with built-in protection against losses. An example is 'zero-loss' staking, which combines a Synth that acts as insurance (Synth Put) with stETH to create ustETH, minimizing risk.

  3. Boosted Assets - Investments designed to amplify gains. For instance, 'yield-boost' staking combines a Synth that bets on price increases (Synth Call) with stETH to form bstETH, enhancing potential profits.

As our ecosystem evolves, we encourage both our user community and our development team to suggest new Synths. This collaborative approach aims to expand the variety and capabilities of the financial assets we can offer.

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