Overview
A synthetic asset is a tokenized position tracking an underlying asset’s price without holding it. It provides exposure to assets not natively on-chain. Synthetics expand DeFi’s reach.
How It Works
Users stake collateral to mint a synthetic tracking a price, such as a stock or commodity. Oracles provide prices, and the system manages collateralization. Synthetics can be traded.
Why It Matters
Synthetics bring traditional assets and indices on-chain. They enable exposure without custody. They carry collateral and oracle risk.
Related Concepts
Synthetic assets relate to Synthetix, Collateral, and Oracles. They track Underlying prices.