THORChain Synthetics Are LIVE!
THORChain Synthetics are LIVE!
The day everyone’s been waiting for is here, synths went live yesterday!
THORChain Synthetics are derivatives of cryptocurrencies that always copy their price. They run on THORChain and have the same attributes as the THORChain coin $RUNE. This means trading Synthetics costs 0.02 RUNE and takes 5s.
If Bitcoin is $40k, then the price of the Synthetic Bitcoin is $40k as well. If the price of Bitcoin changes in any direction, the price of the Synthetic Bitcoin changes accordingly.
It is a brand new asset introduced to the network, and we all need to make sure it works as it should.
After the THORGames, we know there shouldn’t be any vulnerability issues. Now it’s needed to test Synthetics from the economic side, which means that for some time they will run in a “test mode”.
- 5% Minting Cap
From each pool that’s on THORChain, only 5% of its liquidity can be used for minting Synthetics. This cap will be slowly increased to the max of 33%.
- Trading Only
After the release on the mainnet, their sole purpose is cheap and fast trading of all assets on THORChain. With 5s per transaction and 0,02 RUNE per transaction, we expect they will influence mostly trading of $BTC and $ETH.
Traders are essential for every network as they produce most of the volumes and generate a lot of fees. And Synthetics can easily attract a LOT of new capital and users.
The future of THORChain is even more exciting with Synthetics. We wrote about the benefits of Synthetics in our previous guide.
Just to recap:
• Getting yield on top of your Bitcoin or Ethereum? YES
• Having a self-repaid loan? YES
THORChain Synthetics vaults will make the Interest Bearing Synths a reality.
Vaults will allow locking any synthetic in and earning yield upon it. This will enable many things but most notably:
- Interest Bearing Synthetics
Locking synths in vaults make the synthetics Interest Bearing. You will get yield on top of your synthetic $BTC or any other synthetic asset you own.
2. Self-Reapying Loans
You will lock synths in the vault and borrow money in return. And because synthetics generate yield, the loan will get paid itself.
Vaults together with Interest Bearing Synths will be groundbreaking. In addition to what’s been already mentioned, Synthetics will be IBC friendly and will be possible to use them across the Cosmos ecosystem.
If you are a LUNAtic or a fan of any other network in the Cosmos ecosystem, you should be hyped about Synthetics.
Want to check them out? Try them at the Brokkr platofrm!
— — — — — — — — — — — — — — — — — — — — — — — — — — — —