You can now trade FAANG stocks on Ethereum DeFi app Synthetix
Synthetix, an Ethereum-based decentralized finance (DeFi) app, has launched a full suite of synthetic derivatives on the blockchain, according to yesterday’s announcement.
FAANG and STSLA Stock Asset Synthesis are now available for live trading!
FAANG summaries can be exchanged under @kwenta_io.
You can also earn SNX bonuses by contributing to the liquidity of @BalancerLabs pools for off-exchange transactions: https://t.co/F7H65KSP8F pic.twitter.com/nearCElwJ7
– Synthetix ⚔️ (@synthetix_io) April 23, 2021.
Launched in 2018, the derivatives liquidity protocol allows users to issue ERC-20 smart contracts, known as synths, that track other assets (like stocks and cryptocurrencies… and theoretically anything) and deliver returns.
SNX, the platform’s own token, is used to secure the release of synths. At press time, it is the 56th largest brand in terms of market capitalization in the world, valued at $2 billion.
Trade in synthetic stone
According to the announcement, users can now trade synthetic stocks of the following companies: Apple synthetic shares (sAAPL), Amazon synthetic shares (sAMZN), Netflix synthetic shares (sNFLX), Facebook synthetic shares (sFB) and Google synthetic shares (sGOOG) – popularly known as FAANG.
The synthetic Tesla (sTSLA), which was introduced last month, is still listed.
Synths will be available on Kwenta, a decentralized app that uses the Synthetix protocol, meaning no account creation, no deposits or withdrawals, and no user fees.
All shares can be exchanged for other synthetic shares without slippage – the difference between the expected price of the transaction and the price at which the transaction is executed, regardless of the size of the transaction.
In theory, Kwenta traders could outperform traditional financial traders by making the same moves on the same assets, since zero slippage (and no platform fees) would allow investors to capture more value when entering and exiting positions.
Traders will also be able to trade cryptocurrencies such as sETH, sLINK, sUNI and others against their positions in FAANG, opening up a whole new market sector.
Chain and liquidity
For example, pricing for all synthetic inventories is provided by Chainlink, Oracle’s decentralized network that links up-to-date data to smart contracts. This ensures that all Synth prices correspond to actual asset prices.
All of these stock synths are completely #PoweredByChainlink
– ChainLinkGod.eth 2.0 (@ChainLinkGod) April 22, 2021
At the same time, Synthetix will provide 2 000 SNX per pool (in terms of SUSD, representing 80% of each pool) for a total of 50 000 SNX to ensure a liquid after-hours trading environment.
However, an ordinary clock will not intervene. During normal market hours (9:30-16:00 ET), Synths shares will trade against Synthetix smart contracts with infinite liquidity and no slippage, as is the case with dApps like Kwenta, he concludes.
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