Wayki-X Difficult Questions and Answers Phase 3 - Trading Synthetic Assets
Q1: Why trade synthetic assets and what are the benefits?
A1: For ordinary investors, the threshold for investing in native assets is very high or even impossible to participate, and Wayki-X synthetic asset trading can break this barrier. If we are bullish on the stock Facebook, non-American ordinary investors are restricted by foreign exchange, account opening, etc., and cannot buy Facebook stocks and then sell them to earn the difference. However, with the help of Wayki-X, various assets around the world can be traded conveniently and quickly, without these restrictions.
Q2: What are some good investment targets in Wayki-X?
A2: Currently, Wayki-X includes xBTC, xETH, Microsoft, Apple, Nasdaq, etc., covering three major categories: cryptocurrency, US and Hong Kong stock indexes, and US stocks. Foreign exchange, gold, and commodities will be added in the future. In addition to the increase in asset types, delivery contracts, option contracts, etc. will also be added to the gameplay.
Q3: Where does the profit of Wayki-X synthetic asset trading come from?
A3: If you make money trading synthetic assets, the debt pool formed by minting xUSD will lose money, and the debt inside will increase. This increased debt will be shared by all debtors (xUSD minters) according to the debt ratio. Conversely, if you trade synthetic assets and lose money, this part of the loss will be earned by the debt pool, and this part of the money earned by the debt pool will be shared by all debtors according to the xUSD debt ratio. So, your synthetic asset trading profits come from the debt pool, more precisely from all xUSD debtors.
Q4: What are the risks of Wayki-X synthetic asset trading?
A4: Just like ordinary transactions, players need to bear the risk of asset decline while buying low and selling high to earn the price difference. For example, if you are bullish and buy Alibaba's synthetic stock, but it falls shortly after buying, you have to bear the risk yourself. In the future, the contract game will be opened. If you are shorting a certain subject matter, you need to bear the risk of losses caused by the increase in assets. In short, trading synthetic assets entails taking the risk of losing money on the trade.
It needs to be emphasized that what the user buys is a synthetic asset stock, not a real stock. When the real stock is ex-right or ex-dividend, the corresponding synthetic asset will not change in quantity, but the price will have a risk of falling. It is recommended that users pay attention to the ex-right and ex-dividend announcement issued by the stock company in advance, and formulate trading strategies in advance to avoid asset losses.
Q5: Suppose Microsoft is $100, and after I buy it, it rises to $200, and I want to sell it, how do I sell it on Wayki-X? In addition, when buying and selling in the stock market, someone must place an order. Who is the opponent in Wayki-X?
A5: Similar to ordinary transactions, if you sell synthetic assets in Wayki-X, you can directly enter the synthetic asset transaction pair details page to perform the "sell" operation. If you sell $200 worth of synthetic stock, it goes straight to the smart contract, and the smart contract gives you $200 worth of stablecoin xUSD.
In Wayki-X, xUSD debtors are counterparties to all synthetic asset traders. In other words, the trader's profit is the xUSD debtor's loss, and the trader's loss is the xUSD debtor's profit.
Q6: Mortgage ROG to mint xUSD at a mortgage rate of 800%, and the mortgaged xUSD cannot be held. Will I lose money because Microsoft stock has risen from $100 to $200?
A6: If someone buys Microsoft synthetic stock and it goes up, making the value of the synthetic asset go up as a whole, then you will indeed lose money. The specifics are as follows: For example, if you mortgage ROG with a market value of US$800 and mint a stablecoin xUSD of US$100, the debt at this time is US$100. If the overall synthetic asset trading side is more profitable than before, the debt you have to repay at this time may become 110 US dollars or more, and you actually lose money; conversely, if the overall value of the synthetic asset is less than before, the player as a whole loses money , then you can redeem all the mortgage assets by paying the system $90 or less at this time, which is equivalent to your profit.
Q7: Why do you say that Wayki-X's debts will float?
A7: Synthetic asset transactions in Wayki-X take the debt pool as the counterparty, so the profit and loss of synthetic asset transactions will cause the debt pool to fluctuate. If synthetic asset transactions are profitable on the whole, the debt pool increases in debt, regardless of changes in other conditions. Conversely, if synthetic asset trading players lose money as a whole, then the debt of the debt pool will decrease.
In fact, as long as there are enough debtors and enough debts are generated by minting xUSD, the smaller the changes in the value of synthetic assets will affect personal debts. In addition, there is no need to panic if you have more debts, because the increase in debts does not mean that you are losing money as a debtor at this moment, only the moment you destroy the debts and leave the market is a real loss.
Q8: How much is the transaction fee for synthetic assets?
A8: The transaction fee for synthetic assets includes two parts: one is 0.3% of the transaction amount, and the other is 0.001 WICC or WUSD miner's fee. Users can choose whether to use WICC or WUSD as the miner's fee.
Q9: How is the price of synthetic assets determined? Is the pricing determined by the project party or by a third-party organization?
A9: The price of synthetic assets in Wayki-X is fed by the oracle, and the median is currently used. If the BTC quote on OKEx is $9999, Huobi is $10,000, and Binance is 10,001, the oracle captures the data and provides the median of $10,000 to Wayki-X, thus pricing xBTC at 10,000 Dollar. It can be seen that the price of synthetic assets is not determined by a certain institution or organization, it is formed by the oracle machine capturing off-chain data, which is more objective.
Q10: What is the difference between synthetic assets and native assets (real assets)?
A10: Synthetic assets are an asset derived from anchoring the price of the original asset. There are certain differences between the two, which are mainly reflected in the following three aspects:
(1) Birth order: the benchmark asset appears first, and then there will be synthetic assets. For example, you must first have BTC to have the synthetic asset xBTC, and you must have BABA (Alibaba stock) before you can have xBABA.
(2) Value basis: Different native assets have different value bases. For example, stocks are based on the performance of their own company, while synthetic assets in Wayki-X are all backed by xUSD minted by mortgage ROG, and are supported by native assets. asset value impact.
(3) Equity: Original assets such as stocks are certificates of shareholders, and they can enjoy the rights to vote and dividends, while synthetic stocks do not have these rights. For example, if you buy Microsoft stock, and Microsoft has developed very well this year, you can get a dividend of $1 per share at the end of the year, and all holders of this stock can get a dividend, but users who buy Microsoft synthetic stocks cannot enjoy this dividend.
Q11: Does the synthetic asset mean that WaykiChain helps users buy the original asset or just maps the price?
A11: Synthetic assets are derived from anchoring the prices of native assets. They are two different types of assets. When users trade synthetic assets, WaykiChain does not help users buy native assets, but users trade with Wayki-X contracts, in which the debt pool in Wayki-X acts as the player’s counterparty. Simply put, if the user is the buyer, then the debt pool is the seller; if the user is the seller, then the debt pool is the buyer.
The transaction price of synthetic assets is indeed a mapping of the original assets, and the two are basically consistent, which is realized by the oracle.
Q12: If the stock does not open, can the synthetic assets of the stock be traded?
A12: If the native asset does not open for trading, the corresponding synthetic asset cannot be traded either. For example, U.S. stocks are traded from 10:30 p.m. to 5:00 a.m. Beijing time. The corresponding synthetic asset stocks can also be traded during this period, but cannot be traded outside of this period. The reason behind this is that there is no corresponding price for the benchmark asset without a transaction, so it is impossible to feed the price of the synthetic asset.
Q13: Are synthetic assets the same as cross-chain transfers?
A13: Cross-chain is to map the assets on one chain to another chain. For example, WaykiChain supports crossing various encrypted assets on Bitcoin and Ethereum chains to WaykiChain to generate mBTC, mETH and other mapped tokens. At the same time, It can also be safely and freely mapped back. In contrast, synthetic assets are on the same chain. Wayki-X is a decentralized synthetic asset issuance and trading protocol based on WaykiChain. All financial activities of synthetic assets are completed on the public chain of WaykiChain.
In addition, cross-chain can only generate related tokens of the corresponding chain, which is limited to the field of digital currency, while Wayki-X can generate all assets with deterministic value in the world, including stocks, gold, etc.
Q14: Why can't I buy synthetic assets with direct ROG, but buy synthetic assets with xUSD?
A14: The price of ROG is not as stable as that of xUSD. If both ROG and synthetic assets fall, then players who use ROG to trade synthetic assets need to bear the risk of double asset declines, while trading synthetic assets with xUSD only need to bear the risk of one asset falling. In addition, the price of xUSD is more stable than that of ROG, which is convenient for settlement of synthetic assets.
Q15: Was there a project that used coins to play stocks last year to be investigated? Is the synthetic asset transaction in Wayki-X compliant?
A15: Wayki-X is compliant and has no legal risk, which is mainly reflected in three aspects:
(1) Synthetic assets are not assets in the real world, but a simulation of real assets. When users buy synthetic assets such as stocks and gold, they are essentially trading digital currencies, which do not involve laws and regulations in traditional financial fields such as securities.
(2) Wayki-X does not involve asset outflows, and there is no real conversion of RMB into US dollars, stocks and other assets.
(3) Wayki-X itself does not involve the deposit and withdrawal path of fiat currency, it is completely currency swap.
