An open protocol to bring real-world assets to the blockchain
DeFi’s Explosive Growth
Decentralized finance has been the core of blockchain technologies starting from the birth of Bitcoin. Still, several breakthroughs have occurred since 2009, including the widely-accepted stable-coins (such as USDT having the most massive daily trading volume, even more than Bitcoin, among all cryptos), decentralized lending protocols, like Compound, Aave, decentralized exchanges like dYdX, Uniswap, Curve, and crypto asset management protocols, like Yearn. The total value locked (TVL) in the DeFi economy grew from around 500M in 2019 to up to $10 billion in August 2020, within a short eight months.
Current challenges for DeFi
Continued growth will rely on expanding beyond the cryptocurrency community.
The DeFi market has witnessed exponential growth thus far. However, the growth of users and capital has flattened because most of the current DeFi projects are designed solely for cryptocurrency and current DeFi users are mostly early crypto adopters. The lack of inflow of new users and capital is creating DeFi’s bottleneck for future growth.
From DeFi to synthetic assets
Meanwhile, besides only a few financially developed countries like the United States and the United Kingdom, millions of people in rapid-developing economic areas like Asia, South America, Eastern Europe, etc., have limited access to any investment vehicle other than the real estate and equities market. Even when an optimal investment is identified, investors still have a high entry barrier — requirements for holding a large number of assets and previous investment experiences, to name a few. Fortunately, we can solve all of those issues by connecting real-world assets to the blockchain with synthetic assets technologies.
Synthetic assets based on technologies such as the blockchain and smart contracts can solve the problems mentioned earlier. Synthetic assets are financial assets that simulate one or more underlying assets. For example, the all familiar USDT is a synthetic asset mirroring the US dollar.
The types of synthetic assets are diverse and can include foreign currencies, like USD, EUR, cryptocurrencies, like Bitcoin, Ether, equities like AAPL, TESLA, market indexes, like S&P 500, and commodities like gold, oil, etc.
Blockchain and smart contract technologies ensure 100% permissionless and transparency regarding financial product rules and logics, potential risks, escrowed funds, and all the synthetic assets’ transactions. Now, instead of investors who can only choose financial products from large and trusted institutions, they now have an unlimited choice of investment vehicles from various types of synthetic assets on the blockchain issued by anyone without having to trust the issuers. They only need to choose products that suit their risk preferences and no longer need to go through a third-party.
At the same time, the blockchain guarantees the privacy of users through anonymity. That is, although anyone can see the balances of each address, it is impossible to know which person owns the funds.
The synthetic assets market is the largest in the traditional financial sector, and the annual global market size is more than $500 trillion compared to the global equities market, which amounts to $70 trillion. It is foreseeable that once combined with synthetic assets, a massive increase in participants and funds will enter into DeFi. According to the estimation of market research institutions, the global crypto derivatives market can surpass $1.2 trillion by 2021.
Symblox Protocol Overview
Symblox is a decentralized synthetic asset issuance and trading protocol, which is driven entirely by the community. Symblox allows anyone to deposit multiple and supported crypto assets into a reserve pool as the collateral then use it as a value basis to issue any type of synthetic asset. For example, anyone can mint synthetic Bitcoin (syBTC), US Dollar (syUSD), gold (syGOLD), or even stocks, like syAAPL, etc. on Symblox. These synthetic assets can then be traded directly on the Symblox protocol for profit.
Symblox Protocol consists of one reserve pool and three applications, i.e., syFarming, syMinting, syTrading.
- Users collateralized assets with syFarming will expand the reserve pool and earn SYX tokens as rewards.
- The larger the reserve pool, the more synthetic assets users can issue, and the more SYX tokens can be rewarded.
- More synthetic assets also bring larger trading volumes, which in turn generates more trading fees.
Differences between Symblox & other synthetic asset protocols
Symblox supports various crypto assets as collateral, thereby avoiding systemic risks caused by price volatility in a single collateralized asset and providing the scalability for the issuance of trillions of dollars worth of both crypto and real-world assets on the protocol.
The goal of Symblox is to become an integral part of the infrastructure for DeFi; allowing anyone, anywhere to gain on-chain exposure to a vast array of assets.
Through technologies such as blockchain and smart contracts, people who have a common belief in this goal can form a community to help develop and improve the Symblox protocol together.
Asset Security & Risk Control
- Symblox is a fully decentralized synthetic asset protocol implemented entirely with smart contracts and runs on the blockchain altogether. It is not subject to manipulation by any individual or organization;
- Symblox is 100% permissionless and transparent. All the codes are open-sourced, smart contracts safeguard all of the escrowed assets, and all transactions are trackable on the blockchain;
- Symblox supports a variety of crypto assets that embody different risk profiles to be used as collateral. It also implements the market circuit breakers rule and under-collateral liquidation mechanisms, which are all enforced by the smart contracts to avoid systemic risk to the greatest extent;
- Symblox was created for the community and governed by Symblox (SYX) token holders; allowing participants with varying knowledge and experiences from different areas to optimize Symblox to ensure continued healthy development.
Challenges for blockchain technologies aim at DeFi
With the rapid growth of DeFi users and capital, the need for security and optimal performance for the underlying blockchain is more critical than ever. Ethereum has had trouble withstanding the current DeFi transactional volume, resulting in a surge in gas fees. Transactional congestion was also evident, delaying up to several hours. Therefore, the demand for the next generation of blockchain is urgently needed.
The VELAS Solution
Symblox is supported by members of the Velas community. V.E.L.A.S. stands for Virtual Expanding Learning Autonomous System (VLX). It is a secure, interoperable, and extremely scalable blockchain ecosystem that is self-learning and self-optimizing.
VELAS achieves true decentralization through the Artificial Intuition-enhanced Delegated Proof-of-Stake (AIDPoS) consensus algorithm. VELAS’ block producers are selected by Artificial Intuition, eliminating any risk of human error.
VELAS will be the most scalable blockchain in existence at 30,000 transactions/second. Blocks are created every 2–5 seconds, and support the Ethereum Virtual Machine, enabling it to meet the needs of the rapidly developing scope of financial applications on the blockchain.
Interoperability & cross-chain
VELAS has established a “container wallet”; an interoperable wallet that will support over 1,000 different cryptocurrencies under a single wallet address.
VELAS is founded by Alex Alexandrov, the founder, and chairman of www.CoinPayments.net (CPS). CPS is the largest cryptocurrency payment processing platform in the world. Think PayPal, but for cryptocurrencies. Since its inception, CPS has amassed over 3.5 million users, completed more than USD $5 billion in total crypto transactions, and averages $100 million in monthly volume. Their strategic partners include Binance and Shopify.
Symblox Token (SYX)
To effectively establish the Symblox community and encourage user participation, the Symblox protocol will issue a total of no more than 100 million governance token SYX. There is no need to purchase SYX. Users of Symblox protocol can get it for free. Any holder of SYX tokens can initiate proposals and vote for the future development of the protocol.
SYX Token Allocation Structure
Total Supply: 100 million tokens. 10 million tokens will be rewarded to liquidity miners. Upon the official launch, 13.5 million tokens will be issued in the first year to users who mint and trade synthetic assets with an annual 15% decrease in issuance until the entire 100 million total supply is reached. 10% of all tokens minted will be reserved as the development fund to ensure sufficient resources to support and further the development of the project.
Symblox Liquidity Mining Mechanism
To bootstrap the protocol’s reserve pool effectively, Symblox is preparing to launch a liquidity mining incentive plan. Anyone can deposit tokens supported by Symblox into the reserve pool to provide liquidity for the protocol, and the user will receive Symblox token SYX as a reward.
Symblox liquidity mining will be carried out in multiple stages. The first phase will last for 8 weeks, mainly targeting the global Velas community, which has more than 50,000 users holding over 300 million VLX tokens, amounting to more than USD $12 million. VELAS’s community users can provide liquidity by collateralizing VELAS token VLX to the Symblox liquidity mining contract, thereby obtaining a total of 1 million SYX tokens (accounting for 1% of the total supply of the Symblox token) as a reward.