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  • And this is what everyone wants to talk about and this is synthetic assets in crypto.

  • Now, this is the hottest thing right now in crypto, a lot of people are talking about it.

  • Um if I'm honest, I think it's a little early to be talking about synthetic instruments since there's still not a ton of liquidity and a lot of your basic crypto and defy protocols.

  • So again, sure.

  • We see liquidity oh in in ethereum and we see a liquidity and Bitcoin and Cardinal and a few other coins.

  • But we don't see that much liquidity.

  • We don't even see that much liquidity and the put and call options, even the exchange traded ones.

  • So to start talking about synthetics now, I think you just have to be a little careful before you start jumping into instruments that are first of all new and first of all very liquid.

  • But let's talk about them.

  • First of all, what is a synthetic instrument?

  • A synthetic instrument is this It's an instrument that you create in a derivative or synthetic way that acts and behaves like another asset that's already out in the marketplace that we understand.

  • Let me give you some examples of that.

  • So, for example, on the Blockchain, you could create the equivalent of a stock price and actually just went to synthetics this morning and they used to trade or have markets in the price of a share of Tesla stock, but it's not actually a share of Tesla stock that you own, that you have voting rights in the company where you can go see Elon musk at the annual meeting.

  • It's actually a synthetic instrument on the Blockchain that mirrors the price of the Tesla stock price.

  • All right.

  • Sounds cool.

  • Sounds like science fiction.

  • It sounds cool, but it's got a lot of other problems.

  • And I'll talk about that shortly.

  • Also in defiant.

  • On the Blockchain.

  • there are synthetic commodities.

  • You can go and trade the price of oil, but you can do it on the Blockchain as a synthetic instrument and it's supposed to match the price of oil in the world.

  • And yet you don't have to worry about having a tanker or go into an exchange or getting approved as a customer inside of a brokerage account.

  • You can just do it on the Blockchain like that.

  • Okay.

  • In theory, but it gets better.

  • You can have synthetics on foreign exchange, you can have synthetics on the weather, You can have synthetics on anything out there, including the number of corner kicks from England vs.

  • Scotland.

  • And this is this concept of a synthetic instrument and it's the ultimate form of a derivative where you try to take an instrument that we know exists out there and you try to stick it on the Blockchain and remove all of the problems and benefits that happen from actually owning it in the real world.

  • You might have a synthetic on a piece of real estate, you might have a synthetic on maybe a business that's located in a city.

  • All of these things could be the future of synthetics.

  • And again, there are companies out there that are specializing in this and again, I am not recommending, but a lot of us have heard of this company, synthetics that's been around.

  • And again, let's look at their mission because they're trying to solve this problem.

  • And synthetics is a protocol that enables the issuance of synthetic assets on the interior Blockchain.

  • This platform brings non Blockchain based asset exposure, very important to the crypto ecosystem, thus creating a more financial market, allowing anyone anywhere to get to gain on chain exposure to a vast range of assets.

  • Now, let's explain that again on chain exposure to a vast range of assets, the platform brings non Blockchain, asset based exposure.

  • What does that mean?

  • We'll say I want to bet on Elon musk and Tesla, what do I have to do if I really think he's gonna make all the other auto companies go out of business?

  • If I really think everyone's going to be driving a Tesla in the next 10 years, If I really believe that, how can I maximize, Well, I can go buy Tesla stock.

  • Great, How do I do that?

  • Oh, you have to go get a brokerage accounts, You have to go, uh, to a trading platform, you have to go to Robin Hood, you have to go this and to do that.

  • You have to prove who you are.

  • I need your passport, I need a bank account.

  • That's not why we came in to defy is it?

  • We didn't want to have to deal with all that.

  • Oh, I get a dividend.

  • I have to declare that it's a balance sheet item.

  • What's the tax a issuance.

  • There's all these problems and issues that come with that.

  • And so what synthetics is saying?

  • Guess what?

  • We'll give you a share of Tesla but we'll make it a synthetic instrument.

  • It will track the price of Tesla.

  • So if it goes up 10%, we'll give you 10% of your money.

  • If it goes down 10%, we'll take it away.

  • If you give it a dividend on Tesla stock will give you the dividend on the Blockchain asset.

  • But now it'll be equivalent in the Blockchain.

  • Sounds great, right?

  • Sounds perfect.

  • And we can do that for foreign exchange.

  • We could do that for real estate.

  • We can do that for corner kicks.

  • We could do that for uh, the weather.

  • We could do that for the temperature of Miami over the course of the winter, if you want, and you can trade that synthetic instrument.

And this is what everyone wants to talk about and this is synthetic assets in crypto.

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SYNTHETIC ASSETS ? THE HOTTEST THING IN CRYPTO - Brian Rose on Trading Crypto & DeFi

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    林宜悉 posted on 2021/07/15
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