Blockchain and Digital Assets 3 Flashcards
How does the Synthetix platform work and how does a user profit?
SNX is collateral for the entire system, so when a user purchases SNX and opens their position, they become responsible for a percentage of this debt in the system.
The total outstanding USD-denominated debt changes when any Synth’s price fluctuates, and each holder remains responsible for the same percentage they were responsible for when they minted their Synths.
So when a SNX holder’s Synths outperform the collective pool, the holder profits, and vice versa, because their asset value (their Synth position) outpaced the growth of the debt (sum of all sUSD debt). In other words, the trader is betting his returns will exceed the pool’s returns.
What is a cToken in Compound?
A tokenized ownership stake of a token pool within Compound. For example, an amount of cETH would represent someone’s ownership portion of the Compound Ethereum pool.
These tokens are minted and burned as funds are added or removed from their underlying pool.
Can also be exchanged in other markets, but the token holder owns the stake of the corresponding Compound pool.
What indicates a long vs short synth token?
Long: sToken
Short: iToken
What does it mean that the Sets on Set Protocol can be static or dynamic?
Static Sets are bundled tokens of a portfolio of assets where the weights are not changed over time.
Dynamic Sets define a trading strategy that determines when reallocations can be made and at what times.
How is Compound’s collateralization ratio calculated?
Via a collateral factor for each ERC-20 token on the platform based on its volatility, ranging from zero to 90, where 90 is least volatile.
The collateralization ratio is then calculated as 100 divided by the factor.
How are Compound’s supply and borrow rates calculated?
Based on a formula that takes into account total amount being borrowed vs. total amount being supplied on the protocol, less an amount that gets put into a reserves pool.
These are updated every block (15 seconds)
Uniswap V2 and V3 fees
V2: 0.3%
V3: three tiers 0.05%, 0.30%, and 1.00%
What is Yield Protocol?
A protocol that enables fixed rate borrowing
In Synthetix, what are synths?
Tokens whose prices are pegged to an underlying price feed and are backed by collateral, like sETH, sUSD or sAAPL (DAI is also a “synthetic” asset).
What is Synthetix?
A company that creates a variety of liquid synthetic derivative tokens that track the prices of all kinds of real world assets.
What is Set Protocol?
Offers the “composite token” approach to tokenization by combining Ethereum tokens into composite tokens, or “Sets”, which are themselves ERC-20 tokens and fully collateralized by the components escrowed in a smart contract.
The Sets function similarly traditional exchange traded funds (ETFs).
On Set Protocol, what fees can the creator of a Set pre-program at initiation to collect?
The available fee options are:
- buy fee (front-end load fee),
- streaming fee (management fee), and
- performance fee (percentage of profits over a high-water mark).
What is Balancer’s governance token?
BAL, distributed among founders, advisors, investors, Balancer ecosystem fund, fundraising fund, and continual distributions to liquidity providers
What is the SNX token on Synthetix used for?
A utility or network token, which means it enables the use of Synthetix functionality as its only feature and serves as the unique collateral asset for the entire system.
Example: user purchases SNX and mint synths against it, which is debt to be repaid later.
What is CHAI?
A mobile payments app in South Korea that uses Terra‘s network and stablecoins to settle fiat payments with merchants at a fraction of the cost they would otherwise incur via traditional financial institutions.
They have 40-50K daily active users, and processed over $1.8 billion in payments from January to November 2021, with over 70M individual transactions.
