⚖️Scalability
The Perpetual Futures crypto market is 30x+ larger than the Crypto Options market.
How Synths Enable Scalability
Synths can grow as much as the markets they are based on. If the original market, like the Crypto Options market, isn't liquid enough to create lower-risk, higher liquidity Synths, we search for markets that are 99% similar to replicate the strategy more cost-effectively and flexibly.
Provided that Synths, such as Synth Puts and Synth Calls, use 20x levered perpetuals trading, their scale not only takes advantage of a 30x more liquid Perpetual Futures market (in contrast to that of options), but it's also extremely capital efficient (1/20th of collateral is needed for a position). Such capital efficiency, paired with Synth risk controls, provides a very strong value proposition in an increasingly competitive Options market.
Future Synth structures will always take capital efficiency and risk controls into strong consideration when being proposed, analyzed, and implemented.
As the crypto world grows, so does the potential of Synths, possibly even outpacing it, depending on how efficient their underlying strategies are.
CeFi Liquidity
Unfortunately, decentralized perpetual liquidity isn’t sufficient to allow us to achieve our end goal of scaling Synths and Smarcoins into the billions. Projects like have tried to solely use decentralized exchanges, but the lack of liquidity severely limited their ability to scale.
With >25x the open interest on Perpetual Futures on centralized exchanges, Synths can scale exponentially larger than would be possible on just decentralized exchanges living purely on-chain.
Scalable Collateral Base
Synths can use any major cryptocurrency supported by major centralized and decentralized exchanges as collateral, such as BTC and ETH. This means that Synth collateral is extremely scalable and available for users to leverage.
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