New DeFi platform to tackle critical flaws in synthetic asset protocols
A new DeFi platform focused on synthetic assets says existing projects have critical flaws that need to be addressed — including low liquidity and poor usability.
A new project has ambitions to revolutionize synthetic asset trading — delivering a decentralized platform designed to suit the needs of investors in various asset classes.
Beyond Finance enables users to gain exposure to an underlying asset’s price without owning the asset itself. As well as forex, commodities and equities, the platform also supports cryptocurrencies and derivatives.
It is designed to complement rather than replace existing infrastructure, and open up financial services to all in a trustless, non-custodial and censorship-resistant way.
Launching “innovative products”
In August, the project unveiled a partnership with Klaytn, an open source public blockchain, in bringing decentralized synthetic asset trading to users within the Klaytn’s ecosystem.
According to the team, by integrating Beyond Finance’s protocol, Klaytn’s users will be able to access a wide variety of financial assets. Moreover, they can create and access new markets by leveraging assets built on the Klaytn’s blockchain.
Kenneth Moon, Beyond Finance’s co-founder, noted: “With this partnership, Beyond can help launch a number of innovative synthetic products on the Klaytn blockchain. We believe these products need to be user-friendly and cater to all consumers.”
The news comes after the project recently went live with their synthetic asset trading platform. The Beyond DEX Mainnet 1.0 — the first of a multi-phase launch plan — ensures security and stability, the team added.
DeFi: Barriers and opportunities
There was an explosion in new DeFi products during the summer of 2020 — and Beyond Finance believes the momentum in this burgeoning sector will continue well in 2021. The total value locked in lending, insurance, stablecoin issuance and decentralized exchanges have all risen over the past six months.
However, poor usability and high collateralization ratios meant the synthetics and derivatives sector has experienced the lowest growth rate of all — with other critical flaws in existing products including inadequate levels of liquidity, high trading costs, a limited number of assets that are available to trade, and poor price tracking.
Beyond Finance believes the next expansion will happen when projects provide users access to a wider range of financial markets through DeFi. The company says its goal is to “provide limitless access to limitless markets.
The team notes it is aiming to increase adoption and TVL for synthetic products by delivering a better user experience — and focusing on sustainability by integrating layer-two solutions, side chains and parachains for greater levels of efficiency. The project added that it is hoping to tackle some of the vulnerabilities seen in existing platforms, the most serious of which include high gas costs and low scalability. Alpha testing has been successfully completed, and an oracle system will be used to track asset prices in real time.
The synthetic products on offer will be governed by the Beyond protocol and collateralized by BYN tokens, with token holders incentivized to stake and provide liquidity.
According to Beyond Finance, the crypto sector’s determination to provide basic financial services to the world’s unbanked have overlooked something that’s equally crucial — enabling everyone to invest their savings and secure a better future for themselves and their families.
“A small shopkeeper in Indonesia could spend his pocket money to invest in WTI oil futures synthetics, and a delivery man in Bolivia can use small sums of money to invest in synthetic Tesla stocks,” Beyond’s lite paper adds.
Democratizing financial services is one of Beyond Finance’s top priorities, and in time, the platform has the ambition of becoming a decentralized autonomous organization. Right now, it is led by a team of portfolio managers, investment research analysts and seasoned blockchain developers who are based around the world. Collectively, their talents are set to create a bridge from the traditional finance sector to DeFi.
A mobile app of the Beyond Finance platform is scheduled to launch in September, with an official announcement is set to follow.