The barter system, where you trade your cow for someone else’s grains, for example, is probably older than you think. It has its roots going back to 6000 BC when Mesopotamian tribes first entered into exchanges with other groups.
Those exchange methods worked long before things like the Internet or decentralized technology existed. Trading was necessary not because goods had financial value or even industrial utility, but because they were necessary for survival. Back then, societies were not as concerned about gold or silver as they were about grains, milk, and beans.
Although society today lives in a time when artificial intelligence, automation, blockchain technology and decentralization will make the means of exchange much more democratic and private than ever before, goods still derive their value from the same things.
Agricultural commodities provide us with a means to feed ourselves and survive. Energy in the form of oil, natural gas, etc. allows us to keep the lights on and keep the economy moving, and precious metals provide our industrial utility and the ability to hedge against inflation.
This is what it’s about. The above goods are non-fungible. They are not that easy to trade. That means that as valuable as they are, some of that value is being sucked away by old world value chains. This keeps it out of the hands of the everyday individual.
That’s why Comdex is launching a decentralized exchange (DEX) for synthetic assets. So that that value can be unlocked and participants around the world can take advantage of such an unlock event.
What are Synthetic Assets?
In blockchain, a synthetic asset is a tokenized version of another asset, be it tangible or intangible. In the case of commodities, blockchain can be used to symbolize physical assets as well as their financial representations, be it oil, gold or silver. Comdex operates a DEX list of synthetic assets representing all types of commodities.
The benefits of synthetic assets are enormous as they allow users to trade the true value of a commodity without the complexity inherent in owning the non-perishable good itself.
Comdex eases the pain points associated with non-replaceable commodity exchanges
The Comdex Decentralized Synthetics Exchange allows participants to act as:
Traders (who are engaged in buying and selling cAssets against CMDX using cSwap) Minters (who can create and open collateralised debt positions to obtain a newly minted cAsset. They must maintain a minimum collateral ratio of 150% in order to liquidity. Vendors who provide equal amounts of cAssets and CMDX to allow users to facilitate trades and providers to take advantage of rewards and transaction fees.) Strikers (who can earn CMD tokens with Omniflix and Unagii)
The interface itself is easy to navigate. The team and the project are mission-driven. The whole point of launching this product is to alleviate the pain points associated with commodities and digital assets.
Participants get the real benefit of on-chain asset diversification. The benefit of the security and transparency that a decentralized exchange of synthetic assets can provide. Nor do they have to worry about the cumbersome nature of logistics and warehousing that typically accompanies investments in physical goods and raw materials.
Why trade synthetic assets?
Comdex expects demand on its platform to grow at an accelerated pace, given the advantages of synthetics over trading the physical assets themselves. Synthetic assets address multiple risks, including:
Seizure or risk ban – US President Joe Biden’s recent decision to ban oil and gas imports from Russia shows that the commodities market can be unpredictable and grapple with uncertainty. Sometimes governments can go even further by seizing goods altogether. Synthetics cannot be confiscated and trade cannot be banned because they are located on a decentralized infrastructure. Theft risk – keeping gold coins under your bed can make you happier, but it’s certainly not the safest approach. The risk of theft is significant, and the problem is that your home insurance could cover any significant investment as most insurance packages include clauses that prevent coverage on valuable items like gold bars. Elsewhere, synthetics can’t be stolen if you keep your private key safe. Third Party Risk – Even if you stop storing physical items and decide to invest in futures contracts, you will most likely end up storing them with a third party custodian such as a bank or broker. Unfortunately, there is always an insolvency risk associated with any centralized organization, including banks, shipping companies or brokers. In the event of bankruptcy, you can own all or part of your investments. Since synthetics are stored on the blockchain, there is no risk to third parties.
In addition, synths offer great benefits that can help traders have peace of mind about their commodities investments:
Easy access – synthetics allow you to access any commodity market without any barriers. All you need is an internet connection and an account with Comdex. Fees – if you trade physical commodities or their futures, you must be prepared to pay brokerage fees, as well as storage, conversion, transportation, withdrawal, and other fees. Trading synthetic raw materials reduces costs to a minimum thanks to the efficient use of resources. No Expiration Dates on Futures Contracts – Trading commodity futures can be problematic for investors as they are theoretically required to take delivery of the physical goods once the contract expires. Synthetic works 24/7 with no expiration date.
Comdex aims to revolutionize the way people trade commodities by merging decentralized technologies with real-world assets. The hybrid approach of this new robust decentralized synthetic asset exchange is going to change the game for good.
The question is: are you ready?