now,

now,Most decentralized finance (DeFi) applications look like carbon copies of traditional financial products.secondary title

DeFi Ceiling

More traditional investors are entering the cryptocurrency space, and investors in the traditional financial world enjoy many financial instruments. They can use different combinations of these tools to deploy various strategies. However, due to the rapid development of DeFi,Some basic products and services are missing,The imperfect construction of the "decentralized financial market (DeFi market)" and the lack of structured financial tools cannot meet the needs of investors.

DeFi also requires durable and stable assets and liquidity. The basic assets currently supporting liquidity mining can be roughly divided into three categories: transaction fees, loan interest rate spread income, and guaranteed governance tokens. When underlying asset income is insufficient to sustain a credit boom, risks akin to traditional "financial crises" arise.

The entry threshold is too high and the operation is complicated. DeFi is not friendly to traditional investors. If the popularity of encrypted transactions remainsRestricted to crypto enthusiasts and those familiar with the DeFi environmentsecondary title

open value exposure

By publishing synthetic assets, MirrorAccess the 36.3 trillion U.S. stock market, the world's most attractive asset class. Tokenize tangible assets and bring them into the blockchain. It also allows us to see the possibility of synthetic assets solving the bottleneck problem of DeFi.

At present, there is no doubt that SNX based on Ethereum is the most popular synthetic asset, which can trade synthetic assets such as gold, silver, and oil. Other public chains are also actively developing synthetic assets, such asStar public chainThe Coinversation synthetic asset project on Polkadot is actively solving some problems in Defi.

Imagine anyone in the world buying a token that tracks the S&P 500 and being able to use that token as collateral for other DeFi projects like Compound, Aave, or MakerDAO. The model can be extended to commodities like gold or grains, stocks like TESLA or indices like SPY, debt instruments like bonds, and anything else.

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The missing link in the DeFi world

Synthetic assets not only open up price exposure to real-world assets,It is the missing link in the DeFi world. Investors in the traditional financial world enjoy many financial instruments, and they can use different combinations of these instruments to deploy various strategies. And synthetic assets in the DeFi environment help expand the availability of financial instruments and investment strategies. This leads to better risk management and increased trading volume, which improves liquidity.

The popularity of crypto trading is still limited to crypto enthusiasts and those familiar with the DeFi environment. Synthetic assets help overcome this limitation. People with traditional fiat currencies to invest in, or those who want to participate in traditional markets, can now invest without leaving the blockchain environment. This feature helps expand the user base of cryptocurrencies in general.

Synthetic assets have the opportunity to become the next hot spot in the Defi world,Synthetic assets will also help DeFi eat traditional finance, The development of synthetic assets also means that the DeFi space can use existing tracks to enter the capital market. Instead of rebuilding these rails (like the purpose of security tokens), synthetic assets allow the use of tokenized versions of existing asset rails.