- The Synth Marketplace enables users to swap between assets with no slippage and low fees.
- Peer-to-Contract (P2C) architecture establishes markets based on current market prices to achieve infinite liquidity.
- Easily generate synths on the Metronome dashboard or acquire them via the open market (Curve).
- Secure permissionless, non-custodial, and trustless swaps.
- How Does The Synth Marketplace Work?
- Synth Use Cases
- Directional Trading
- Synthetic Swapping
- Swapping on the Open Market
- What’s on the Horizon?
Inside the Metronome dApp lies a powerful tool: The Synth Marketplace. At its essence, the Synth Marketplace enables users to facilitate slippage-free swaps with minimal fees on all the supported synths Metronome offers. This ensures users get the asset they want at the expected price and produces an environment that minimizes costs, a highly beneficial perk for those looking to swap larger amounts.
How Does The Synth Marketplace Work?
Compared to traditional CEX’s and order book-based DEX’s, swapping on the Synth Marketplace provides many advantages. All trades are executed via a method called Peer-to-Contract, or P2C. With the help of a trusted price oracle like Chainlink, assets are given an accurate exchange rate, which can then be converted via the Metronome Synth Marketplace. This innovative approach, utilizing smart contracts to establish markets based on current market prices, results in infinite liquidity (up to the amount of collateral deposited) without the need for a counterparty. In other words, the contract will burn the synth you exit and mint the synth you enter. There are no sign-up requirements or account verification needed to trade, and users hold their own wallets with the ability to withdraw funds at any time.
The amount of liquidity available for Metronome Synth is restricted by a mintage cap on each asset. This cap, which applies to all users of the platform, is set to preserve the stability of the entire system by avoiding a large accumulation of any one synthetic asset or posted collateral. The collateral assets also follow a global cap that is shared by everyone who deposits them, with the aim of maintaining the overall health of the app. As long as synths do not exceed the global synth mintage caps, they can be exchanged for other synths on the marketplace with ease.
Regarding fees on the Synth Marketplace, they are highly competitive at only 0.25% due to its trustless nature. Since smart contracts are used to execute trades without intermediaries, there are no profits for them to take. And with no slippage, the Synth Marketplace becomes a more attractive option compared to both decentralized and centralized exchanges.
Synth Use Cases
Navigating the Synth Marketplace is simple as it was created with ease of use at the core of the design. Head over to the Metronome dashboard to get started generating and swapping your first synths. Additionally, you have the option of obtaining synthetic assets from the open market (such as decentralized exchanges) before swapping them on the Synth Marketplace.
The Synth Marketplace offers more than just a synthetic swapping environment — it also provides users with the ability to partake in directional trades. This means that users can take long or short positions, depending on their market outlook. For instance, a user can mint msBTC by depositing their chosen collateral, and then swap it for msETH, effectively taking a long position on ETH and a short position on BTC. This type of trading enables users to take advantage of market conditions and switch between assets easily and cost-effectively.
Currently, on the Synth Marketplace, users can swap between:
Swapping on the Open Market
For DeFi enthusiasts, swapping synths on the open market can be a lucrative way to get involved. You can do this through two Curve pools: the msETH pool, which includes ETH and msETH, and the msUSD/FRAXBP pool, which includes FRAX, USDC, and msUSD. If you want to become a liquidity provider on Curve, you can earn additional APY on your deposits.
What’s on the Horizon?
- More Collateral
- More synthetic assets
- Multichain support
- Additional DEX Liquidity
- Smart Farming Integration