Synthetic Assets on Horizon Protocol: Tremendous Achievement for DeFi
August 04 2021 - 4:00AM
NEWSBTC
Synthetic assets are different DeFi platform tokens that digitally
represent real-life derivatives like futures and options. They are
created via smart contracts on a distributed and globally
accessible blockchain network. Horizon Protocol Horizon Protocol is
a DeFi platform for creating on-chain synthetic assets (zAssets)
based on real-life financial assets. The protocol is a fork from
the liquidity derivatives protocol, Synthetix. Therefore, instead
of reinventing the wheel, Horizon improves the interoperability,
scalability, speed, and affordability of on-chain derivatives
trading. It introduces the trade of more derivative products on
blockchains than the existing synthetic assets-based DeFi
protocols. Horizon Protocol and other DeFi platforms Horizon
Protocol is an improvement on the established DeFi synthetic
asset-trading platform. First, it forks from Synthetix, thereby
advancing on this existent liquidity derivative protocol. Second,
it seeks to expand the current asset range with more options from
the traditional finance market and NFTs from the crypto market
through the partnership with Phoenix Oracles. In the future, it
will expand the number of trading tools. It even aims to expand the
trading options. Moreover, it is optimized with the Binance Smart
Chain. Creation of zAssets at Horizon Exchange The utility token
for the Horizon Protocol platform is HZN. It serves as the
collateral for the trading of synthetic assets (zAssets). HZN
holders receive incentives to stake in Horizon Protocol from
transaction fees on Horizon Exchange being redirected to the reward
pool for HZN stakers and the Horizon Protocol inflation policy that
was designed to stimulate growth in the early stages of
development. On Horizon Exchange, zAssets are assigned a value
based on the real-world asset’s price received by an oracle.
Horizon protocol uses Phoenix Oracle, Chainlink and Band that links
real-world financial and crypto assets with Horizon Exchange. HZN
holders provide collateral at a predefined collateralization ratio
of 800% to safeguard against market volatility. Fluctuation in the
HZN price will require the benefactor to reset their
collateralization ratio by burning or creating more zAssets to
reclaim their HZN. This collateralization ratio is subject to
change based on community governance and further testing. Which
synthetic assets will trade on Horizon Exchange? Horizon Exchange
will offer trading tools like limit orders and stop losses. It will
expand its functioning to options, leverage, and margin trading.
The tradable zAssets on the Horizon Exchange include: Equities
Shareholders hold the equity in a company. It is the value of the
company’s total assets after deducting the total liabilities.
Commodities These refer to the tradable raw products. Hard
commodities include mostly natural resources like oil, while soft
commodities refer to agricultural or livestock products like
coffee. Market Indices Derivatives can be based on market indices
like S&P 500. The value of such futures or options varies with
the value of the underlying stock index. Corporate assets These
refer to the financial assets of a business. Vehicles, equipment,
and property are examples of corporate assets. Physical assets
These are tangible assets of commercial and financial value.
Equipment fitted in an apartment building, such as a fire fighting
system, are physical assets. Crypto assets Short, long, and unique
crypto assets from various blockchains can unite on the Binance
Smart Chain via Horizon Protocol. Some unique versions slated to be
in Horizon Protocol’s synthetic asset range are NFTs and
fractionalized NFTs. In the future, the Horizon Protocol DAO will
vote for assets they wish to see. Conclusion Synthetic asset-based
trading without an intermediary is a tremendous achievement for
DeFi. You can digitally trade in a highly secure environment based
on asset price fluctuations in the global finance market. Horizon
Exchange offers the ability to trade a host of synthetic assets
ranging from real-world economy assets to synthetic crypto assets
on the same platform. You can learn more about Horizon Protocol on
Twitter and Telegram here.
Amp (COIN:AMPUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Amp (COIN:AMPUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024
Real-Time news about Amp (Cryptocurrency): 0 recent articles
More Amp News Articles