Synthetix, a derivatives liquidity protocol with over $666 million TVL, has announced that through their partnership with Chainlink, sOIL is now live Synthetix.
sOIL is a Synthetic asset that mirrors the price movement of oil using a Chainlink decentralized oracle network.
Source: Synthetix
There will be two versions of this token available: sOIL which enables users to capture a long position and iOIL which enables users to capture a short position.
Users can also set up a binary options markets with sOIL to trade on the future price of the asset – utilizing a Chainlink powered decentralized oracle network to develop a non-expiring Crude Oil Index based on ICE Brent Crude Oil futures prices.
“The launch of sOIL represents the future of decentralized finance — more and more of the traditional market will soon be accessible through Synthetix, and our integration with Chainlink allows us to continually tap into high-quality data providers to provision new assets.”, stated Synthetix.
The innovation and engineering involved in the development of this product are noteworthy, as price discovery for an asset such as oil occurs primarily in the futures market made up of individual contracts with varying expiry dates.
Chainlink also published a blog outlining the methodology used to create a synthetic derivative product.
“Together with Synthetix, we have developed a novel pricing mechanism to power a new synthetic derivatives product that gives users on-chain exposure to oil. This innovation is one in a growing number of examples of how Chainlink is bringing synthetic assets from traditional markets to DeFi through the provisioning of secure oracles with access to high-quality data.”, stated Chainlink.
Synthetix also noted that in the ‘not so distant future’ cryptocurrency traders will be able to access a wider range of assets across industries without leaving their cryptocurrency wallet.
The creation and launch of this product leave reason to believe that more products that bridge the gap between CeFi and DeFi will soon follow.
