From liquidity mining to synthetic assets
On October 15, 2020, Symblox yield farming/liquidity mining launched on Velas blockchain. Since then, we’ve developed and released a few dApps including a decentralized Automated Market Making (AMM) exchange (https://app.symblox.io), community governance system (https://vote.symblox.io), Ethereum asset cross-chain bridge (https://x.symblox.io), and a no-loss mining dApp (https://pvlx.symblox.io). We’ve also released an iOS and Android app called DeFi wallet. In less then 4 months of launch, there has been more than $66 million USD worth of assets traded on the Symblox protocol.
After completing the construction of various infrastructures on the Velas blockchain, Symblox will begin rolling out synthetic asset issuance and trading features in 2021.
In 2020, decentralized synthetic asset protocols have gained a lot of traction. There have been a few notable projects in this field such as MakerDAO (synthetic asset issuance), Synthetix (synthetic asset issuance and trading), as well as emerging projects, including UMA, Serum, Injective Protocol, etc.
Compared with other synthetic asset protocols, an important distinction of the Symblox protocol is that the Oracle becomes the pivotal focus of the protocol design.
- An oracle is a way for a blockchain or smart contract to interact with external data. With blockchains being deterministic one-way streets, an oracle is the path between off-chain and on-chain events.
The Oracle provides security for all assets in the entire protocol. For example, if the protocol enables users to mint synthetic assets by collateralizing bitcoins, then the oracle needs to provide timely and accurate bitcoin prices. Assuming that the current market price of Bitcoin is 30,000 USD, if the oracle provides the wrong price, such as 1 BTC = 300 USD, an attacker can use the synthetic U.S. dollar syUSD to exchange a large amount of Bitcoin at an ultra-low price, causing the provider of the collateralized asset to suffer huge losses.
There are many attack cases that target the Oracle of DeFi applications, including:
- Synthetix’s oracle failure: https://www.chainnews.com/news/073040506221.htm,
- bZx’s hacking: https://www.chaindd.com/3446433.html,
- yVault vulnerability incident: https://www.chainnews.com/articles/126019108706.htm,
- Harvest Finance hack incident: https://cointelegraphcn.com/news/the-hack-of-harvest
and so on.
Therefore, Symblox regards the Oracle system as the key focus of the protocol design. With reference to the concept of Proof Of Staking (PoS), such as ETH 2.0, SYX tokens are staked in the Oracle nodes. The staked SYX is used to secure the network and to deter bad actors from manipulating the Oracle price data. If the price data provided by a certain oracle node deviates, the SYX tokens staked by that node will be forfeited accordingly. In this way, the value of the token and the security of the protocol will be tied together, and the security of user assets on the entire synthetic asset protocol will be guaranteed to the greatest extent.
As an incentive for users to stake their SYX tokens, all SYX holders who stake SYX tokens can get SYX token rewards from oracle nodes (similar to liquidity mining). In addition, users who stake SYX can also receive a fee from synthetic assets trading on the Symblox protocol. For example, by trading syBTC/syUSD, participants can get the corresponding fees in syBTC and syUSD. All the rewards will be accumulated into the rewards pool, which will then be distributed to Oracle node stakers proportionally.
As the most important component of the Symblox Synthetic Asset Protocol, we will release further details about the Symblox Oracle system design in the near future.
About Symblox Smart Contract
Symblox contract code open source address
Switch to the V2 branch for the latest version
Symblox contract audit report
Symblox contract address
- SYX token: V5BiAVREvmgkxhxetGY6JcAtTHS56v9jx1
- VLX hosting: V4vv6X9wkvMfbrtxJ4Mb3FyuW5CLD6Kr7n
- USDT (VELAS): V7t2XWUe82x2vBDWsChwS9oMEUGPemahhJ
- Development Fund: V3B665rZ1wyg84brEUmMFTmrHYUYpp7y6X