Synthetic Trades

How it works

Synthetic trades lie at the heart of AnyDex’s model for delivering the gasless, taxless, impactless trades required to expand its DEX beyond DeFi use cases to RWAs and TradFi assets.

Synthetic trading refers to a model whereby instead of directly trading a given asset, traders exchange a representation of that asset. This allows non-DeFI assets such as RWAs and TradFi assets (stocks, options, indexes etc.) to be represented and therefore traded on the blockchain. It also helps remove many of the underlying costs and fees associated with direct trading of the assets themselves.

In AnyDex’s model, the assets being traded are represented by their quote alone, and are backed by USDT holdings. Whereas a standard exchange model requires the exchange to have proof of ownership over the asset being traded, this model means that AnyDex doesn’t necessarily need to acquire assets before listing them. Backed entirely by USDT rather than the traded asset itself, this means AnyDex has much more flexibility to rapidly onboard any asset type. Ultimately, AnyDex can trade anything that has a quoted value, including a full range of RWAs and TradFi assets in addition to DeFi assets.

The mechanism behind AnyDex’s synthetic trading model works as follows:

The value of each asset is quoted from a trusted source and then the user’s investments are updated according to the value. These updates are made constantly and checks every second to guard against manipulated wicks i.e big volume candles that artificially attempt to liquidate users holdings.

Even though AnyDex’s model isn't partaking gas fees as a cost, it is still using real-time data to perform, analyze, and execute every trade, creating a seamless user experience, whether you are trading DeFi assets, RWAs or TradFi assets.

The synthetic trading model solves the key issues of asset representation, asset onboarding and excessive gas and trading fees holding DEXs back from facilitating the trading of RWAs and TradFi assets. In doing so, it lays the groundwork for AnyDex’s unique ability to let users trade any conceivable asset that has a quoted value.