The rise of self-custodial wallets and the shift towards transparency and user control has shown the tides of decentralization ushering in a new age of web3. This latest iteration involves tools that traditionally may have only been available in centralized financial products such as perpetual markets, options, and derivatives like synthetics.
The power behind synthetic cryptocurrencies lies within the permissionless creation and lack of central party risk. Synthetics allow any asset to become tokenized and tradable: this includes novel counters such as CO2 emissions or mining hash power, and more. A notable conception was the addition of synthetic Bitcoin minted on the Ethereum blockchain.
While not a new concept with Synthetix launching in 2017, we are witnessing a large movement toward the derivatives market with the growing popularity of synthetics. Protocols that offer an ecosystem with the essentials all-inclusive are far and thin, therefore an upgrade is needed to fulfill this gap. While Synthetix is launching its V3 this year with many improvements made to the complexity of the product, the need for multiple platforms continues to inhibit user experience.
Projects such as Synthetix and Abracadabra are both great onramps for users to enter the synthetic scene and generate assets, however, they are limited in what they offer and leave users having to jump through external hoops to achieve their goals. This could quite quickly become a real problem with users losing money in fees as well as the inherent risk of moving assets more times than necessary.
More recent synthetic applications such as MARKET Protocol and Universal Market Access (UMA) have made improvements upon their predecessors which relied upon external entities to trade synthetics. These protocols use crypto-external assets and therefore may not fully plug in with cryptocurrency users.
By noticing a gap in the market, Metronome has been able to position itself as one of the first synthetic protocols that can supply market-leading features in one ecosystem. With the current options available, problems such as UI constraints, limited opportunity, and poor user experience are common themes.
With all this in mind, Metronome Synth was built to provide an environment where users can maximize their capital efficiency through the:
Additional features of a collateralized synthetic ecosystem include the ability to speculate on a synthetic asset in relation to a stablecoin or secondary currency. Overall, Metronome Synth is a powerful tool that can give users total exposure to multi-chain assets without having to fully transition into that asset on its native blockchain.