Synthetic asset

Sometimes referred to as simply synths, synthetic assets are collateral-backed assets whose value fluctuates depending on a reference price. They can be defined as anything an oracle can attest to, from digital securities or a share of Apple stock to entire index funds like the S&P 500.

On Liquid, synths work by having the user (borrower) lock collateral into a smart contract to borrow the synthetic asset, which acts as a digital bearer asset that can then be self-custodied and traded confidentially between peers.

Learn more about synths by reading the Synthetic Asset Smart Contract for the Liquid Network whitepaper.