Derivation Projects: An Important Direction for Future Financial Innovation

Derivation projects, as an important area of financial innovation, are likely to become an extremely important track in the future. Looking at the historical patterns of the crypto market's development, each cycle of bull and bear markets is accompanied by the rise and fall of new emerging track projects. It is foreseeable that the popularity of derivation projects will likely gradually rise during this bull market, and some projects that have already begun to emerge belong to this category of derivation projects.

Derivation projects mainly include multiple subfields such as futures, options, and synthetic assets. Among them, synthetic assets, as an innovative derivation, are receiving increasing attention.

A synthetic asset project worth paying attention to

Recently, a global debt pool model derivation protocol based on Arbitrum and zkSync has attracted attention in the industry. The project aims to create a derivative trading market with unlimited liquidity, where anyone can easily create and trade various synthetic assets, including cryptocurrencies, stocks, precious metals, foreign exchange, and more.

The project is currently in the early stages and is undergoing Alpha testing. Users participating in the testing can receive some rewards, including tokens and NFTs. To participate in the Alpha testing, you need to join the project's community and apply for the corresponding role permissions. Once you obtain the permissions, you can participate in the testing and experience the core features of the project.

It is worth noting that it is best to use a small amount of insignificant funds wallet when participating in the test, in order to control risk.

Core Functionality Experience of the Project

1. Staking and Lending

Users can stake USDC as collateral and borrow a stablecoin JUSD that is pegged to USDC. For every 1 USDC staked, 1 JUSD can be borrowed. JUSD is one of the essential components for users to interact with the protocol.

2. Synthetic Asset Trading

Users need to first transfer JUSD to the designated debt pool, and then they can purchase various synthetic assets on the market page. The price of synthetic assets is determined by the oracle, and trading will not affect the price, providing infinite liquidity.

3. Profit and Loss Mechanism

When the price of synthetic assets in the debt pool fluctuates, the user's debt will also change accordingly, resulting in profits and losses. If the user's unrealized profit and loss percentage in the debt pool falls to a certain level, it may trigger a forced liquidation.

In the future, the project plans to create more debt pools, covering various asset types such as cryptocurrencies, stocks, foreign exchange, and precious metals, providing users with more options.

Summary

As an innovative synthetic asset project, the protocol explores some new mechanisms in the derivation field that are worth paying attention to. However, since it is still in the early testing stage, its security and stability need further verification. For interested users, they can moderately participate in the testing to understand the project, but they should also be cautious in managing risks.