Decentralized Synthetic Exchange: Comdex as a Case Study
Various investments and asset classes have distinct characteristics, risks, and benefits. Investments and asset classes can likely fall into the following categories: shares, cash, fixed interest, property and more depending on your risk tolerance.
The aim of an investment today, be it in the form of time, money, or an asset, is usually concerned with getting appreciation over what was originally invested or an increase in the value of the asset invested over time.
Over the years investments have taken different forms which include bonds, stocks, real estate properties, derivatives, and more. The bid to make investing in any of the above-mentioned investment forms readily available to everyone has led to the development of blockchain technology, web 3.0, and decentralized finance (DeFi).
In this discussion, we would see how the traditional investment methods such as investing in synthetic assets which is a type of derivatives investment are being fashioned and tradable on the blockchain with the help of decentralized apps (Dapps).
Understanding synthetics as a derivative.
Financial instruments or contracts are assets such as cash that may be traded or are seen as packages of capital that may be traded. In other words, it represents a real or virtual document representing a legal agreement involving any kind of monetary value.
Security represents financial instruments that hold some type of monetary value that can be exchanged with individual goods or assets of the same nature.
The term derivative refers to a type of financial contract or instrument whose value is dependent on an underlying asset or class of assets. With derivatives being a financial contract it can be set between two or more parties on an exchange or over-the-counter (OTC) desk to be traded.
Synthetics on the other end combines various derivatives such as futures and options for the aim of simulating its underlying assets.
Comdex Decentralized Synthetic Exchange
There’s been a need to democratize our traditional finance (TradFi) system by reducing complexities and regulatory hurdles to enable everyone to access investments in financial assets.
Having this in mind, COMDEX is a decentralized synthetics exchange built on Cosmos to democratize finance.
It’s interesting to note that with the COMDEX protocol, users can collateralize and leverage their assets to take exposure to a range of inflation-resistant synthetic assets.
Cheers to the immutability of the blockchain, the web 3.0 refashioning model which has been taken into account with the interoperability of IBC, the Comdex bridges, and finally the tokenization of commodity assets, there’s now a means for a flow of capital from Decentralised Finance systems (DeFi) and Centralized Finance system (CeFi).
COMDEX’s synthetics protocol unlocks access to a vast set of commodity debt assets and liquidity, making the flow of capital from DeFi to CeFi seamless.
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