The Synth Marketplace is where users can swap synthetic assets inside the Metronome Synth dApp.
To swap synthetic assets on the marketplace, users must first deposit collateral and mint a synthetic asset through the Metronome Dashboard. Alternatively, users may be able to acquire synthetic assets on the open market (i.e. DEXes) before swapping on the Metronome marketplace.
Swaps on the Synth Marketplace have zero slippage and a low trading fee of 0.25%
Swaps can be utilized to effectively create long or short positions.
- Long example: Deposit USDC for msUSD > Swap to msETH. (User is effectively long ETH)
- Short example: Deposit USDC for msETH > Swap to msUSD. (User is effectively short ETH)
Liquidity for MET Synth is limited by a mintage cap on each individual synthetic asset, which is a global cap shared by all users on the platform. This maintains the health of the overall ecosystem by preventing excessive concentration in any one synthetic or posted collateral. Collateral assets additionally adhere to a global cap shared by all depositors for the same purpose of system health.
Individuals have their own personal liquidity limits based on their collateral factor.
Synths can be exchanged for other synths at their current market price, assuming they do not exceed the global synth mintage limitation. Mintage caps and other parameters are designed to prevent potentially unfavorable conditions for the synthetic assets, such as a situation where too many traders swap one synth for another, and thus disconnecting synth collateral from outstanding mintage.