Proof of reserve

Introduction

In our DeFi platform, synthetic tokens play a crucial role when the underlying assets are not available on the blockchain or lack sufficient liquidity for effective fund management. These tokens are engineered to represent the value of these underlying assets, ensuring that the platform can participate in a broader range of markets.

Synthetic Token Structure

Each synthetic token managed by our platform is meticulously backed on a 1:1 basis with reserves held to guarantee its value. This strict backing is fundamental to maintaining trust and stability in the valuation of synthetic tokens.

Proof of Reserve

• Real-Time Transparency: We provide real-time proof of reserve via our dashboard, allowing any stakeholder to verify that each synthetic token is fully backed by equivalent assets.

• Reserve Management: The reserves are strategically held in two types of wallets:

  • Hot Wallet: Located on different centralized exchanges (CEXs), this wallet facilitates fast liquidity transactions, enabling quick adjustments to the fund's holdings as market conditions change.

  • Cold Wallet: Used primarily for long-term reserve storage, this wallet offers enhanced security by holding assets offline, thus protecting them from potential online threats.

Conclusion

The synthetic token framework within our DeFi platform is designed not only for operational flexibility but also for high transparency and security. By maintaining a clear, real-time proof of reserve, we ensure that all synthetic tokens are adequately backed, fostering trust and reliability among investors and stakeholders. This approach enhances our platform’s capability to adapt and thrive in the dynamic DeFi landscape.