The barter system, where you trade your cow for someone else’s grains, for instance, is probably older than you think. Barter dates back to around 6000 BC, when Mesopotamian tribes made the first exchanges with other people.
These methods of trading worked long before decentralized technologies and the Internet. Trade was not necessary because commodities were of financial or industrial value. It was important for survival. Back then, societies weren’t as worried about gold or silver as they were about grains, milk, and beans.
Today’s society lives in a world where decentralization, artificial intelligence and automation will allow for more private and democratic exchanges than ever before. However, commodities continue to derive their value the same way.
We can survive and eat thanks to agricultural goods. Natural gas, oil and natural gas are all forms of energy. This allows us keep the lights on, keep the economy going and provides us with the opportunity to hedge against inflation.
Here’s the thing. These commodities cannot be traded. These commodities are difficult to trade. It is not easy to trade them, regardless of how valuable. This means that it is not in everyone’s hands.
That’s why Comdex is launching a decentralized exchange (DEX) for synthetic assets. That unlocks value, and all can profit from it.
What are Synthetic Assets?
Synthetic assets are tokenized versions of other assets, tangible and intangible. Blockchain can be used for both physical and financial assets, such as oil, gold, or silver, in the case of commodities. Comdex has a DEX that lists synthetic assets for all kinds of commodities.
Synthetic assets offer huge benefits, as users can trade real world value for a commodity and not have to deal with the complications of holding the non-fungible asset.
Comdex eliminates the pain points associated with non-fungible commodities exchanges
Participants can act in the following capacities through the Comdex Decentralized Synthetics Exchange:
- Traders: These are people who trade cAssets to CMDX with cSwap.
- To obtain a new cAsset, miners (who are able to create and open collateralized credit positions). For liquidation to be avoided, minters must have a minimum collateral ratio (minimum 150%).
- The Liquidity Providers that provide the same amount of CMDX and cAssets to users so they can trade and receive rewards.
- The Stakers can use Omniflix or Unagii to earn CMD tokens.
Easy navigation is provided by the interface. Mission-driven is the mission of both the team as well as this project. Launching this product is about removing the burdens associated with digital assets or commodities.
On-chain diversification offers real benefits to participants. A decentralized synthetic asset market can offer security and transparency. They also don’t have to worry about the cumbersome nature of the logistics and storage that typically comes with investing in physical goods and commodities.
What are the benefits of trading synthetic assets?
Comdex expects that the demand for its platform will grow at an increased pace due to the advantages of synthetics trading physical assets over them. The benefits of synthetic assets cover multiple risk factors, such as:
- Confiscation, or taking on the risk – the recent decision of US President Joe Biden to ban oil and gas imports from Russia shows that the commodity market may be unpredictable and struggle with uncertainty. Sometimes, governments have the option to seize all of the commodities. As synthetics reside in a distributed infrastructure, trading can’t be prohibited and they are not subject to confiscation.
- Risk of theft – storing gold coins under your bed can make you happier, but this is not the safest approach for sure. There is a high risk of theft. However, your home insurance may not cover large investments. Most insurance policies have clauses that prevent coverage for items such as gold bars. Elsewhere, synthetics can’t be stolen if you keep your private key safely.
- Risk to third parties – even if you give up storing physical items and decide to invest in futures contracts, you will most likely end up storing them with a third-party custodian like a bank or broker. There is an inherent insolvency risk with any central organization. This includes banks, shipping companies and brokers. You can either own your investments in full or part if you file bankruptcy. There is no risk to third parties because synthetics can be stored on blockchain.
Synths offer traders great peace-of-mind about commodity investments.
- Accessible from anywhere – with synthetics, you can get exposure to any commodity market without any obstacle. An internet connection is all you will need and a Comdex account.
- The cost of the services – if you trade physical commodities or their futures, you have to be ready to pay broker fees, as well as storage, conversion, transportation, withdrawal, and other fees. Because of the efficient use resources, trading commodity synthetics can reduce your costs.
- Futures contracts are not subject to expiry – trading commodity futures may be problematic for investors, as in theory, they are obligated to take delivery of the physical goods once the contract expires. The synthetics are available 24/7 without expiry.
Comdex aims to transform the way people trade with commodities. It combines decentralized technology with real-world assets. It is going to revolutionize the market with its hybrid approach to this robust, decentralized synthetic-asset exchange.
Is it possible?
Image: Pixabay