Create your synthetic token with features that users will value. Whether you already have the vision of the product or are in search of solutions, Exio.Tech is here to help you get started.
The Exio.Tech team provides full-circle development of synthetic tokens using blockchain programming languages, mainly Solidity, to write smart contracts. Apart from building tokens, we develop platforms where they will function and crypto wallets designed for users' interaction.
Our team delivers modern solutions such as APIs for cross-chain operations, builds the user interface, and creates design. Also, we carry out mobile app development.
Building the product from scratch, we will also help you to bring it to the market and achieve its successful implementation.
Synths or synthetic tokens are derivatives that mimic prices of other assets and stocks such as gold, Bitcoin, Eth, USD, Tesla, etc. Synthetic crypto tokens function via smart contracts based on token standards such as ERC-20.
Through synthetic tokens, holders can access exposure to underlying assets without owning them directly. Crypto synthetic tokens track the prices of those assets and enable their employment in a decentralized way.
There are several ways for synthetic assets to achieve their target price. One is when the entity behind a stablecoin sets up a "reserve". For instance, it stores $1 million to back one million units of stablecoin.
In this case, whenever a stablecoin holder withdraws their tokens, an equal amount of the collateral is taken from the reserve. The second option is used by Maker protocol, which locks up a user's collateral via a service "Vault".
Afterward, based on smart contracts execution, a user can borrow stablecoin DAI.
The third way to achieve the price is algorithmic. It is not based on collateral but on a stabilization algorithm that issues more coins when the price rises and decreases supply when the price falls. This way, the demand and supply are balanced and the price stable.
One of the most popular synthetic assets is the dollar-pegged synthetic stablecoin DAI, issued by Maker DAO.
Maker's governance token, MKR, on the other hand, is backed by Ethereum. An example of a commodity-pegged synthetic token is a gold-pegged PAX Gold.
However, the collateral of the synthetic assets can be anything: real-world assets, cryptocurrencies, stocks, etc.
What collateral to choose depends on the creator's imagination. So, these tokens essentially enable investors to tokenize and trade whatever they want.
Synthetic tokens are useful tools for traders. They enable time and cost-effective P2P payments. These tokens also allow storing cryptocurrencies without changing them back to fiat and not worrying much about price volatility.
Additionally, making cross-chain transactions is easier with synthetic tokens.
Another benefit of synthetic tokens is that anyone can create them. However, planning and developing the project thoroughly is essential to success.