Conjure Finance allows users to tokenize any financial asset on Ethereum and Layer 2 blockchains. The permissionless protocol lets users create their own synthetic assets for currencies, tokens from other blockchains, FX baskets and indices, and even the more unexpected real-world commodities such as bananas.
“We chose bananas at the start because it’s a fun ape meme, cause apes like bananas so why hold USDT or USDc when you can hold bananas as your stablecoin,” said the project following the launch of its banana synth.
“But then we thought about what this actually means. Bananas have provided a stable net gain vs the USD over the last decades, and even account for inflation, making it an attractive inflation hedged stablecoin.”
Conjure’s mission runs deeper than just offering users the ability to trade these synths. If Ethereum’s meant to be the global settlement layer for the future of finance, then it needs to allow users to get exposure to all the financial assets they want to, globally and permissionless, says the project.
The way to do this is by providing anyone with the skills and tools to create and deploy their own front end and contracts to create their own synths. Conjure has also created Open Oracle Framework, which can supply over 100 feeds in a single transaction allowing access to more on-chain data and allowing users to create their own oracles and feeds with ease.
Conjuring synths
In order to mint a synthetic asset on Conjure Finance, users can go to The Create Interface on the DApp after connecting their wallets.
They can then select a name and ticker symbol for their asset of choice and even include an optional fee that will be paid to them every time their asset is minted.
Synthetic assets created on the platform can be one of three types – single asset, multi-asset, or an index. While single assets can track the value of a single target asset like BTC or USD, basket assets enable the user to choose from many oracle feeds and put them together to form a single price using weights. Finally, indices allow users to have multiple feeds contributing to a single price feed using the market cap for the asset as the weight, which updates dynamically.
When it comes to choosing an oracle source, users can choose a template such as supported Chainlink feeds and Uniswap TWAPs, or instead, create their own contracts.
Conjure Finance claims that the resulting Synths are fully collateralized by Ether and have their collateralization and value pegged via a powerful and flexible ability to combine multiple arbitrary price sources to produce a single reference price.
What’s more, once these synths are live and minted by other people they provide an easy way to spend capital tied up as ETH. The minted assets are CDP-based loans, but with zero interest. Essentially, a user can keep ETH exposure by selling the minted asset, without actually needing to sell. As an added benefit, users will be exempt from paying any capital gains tax in the process seeing as loans aren’t subject to taxes.
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Open Oracle Framework
Conjure’s Open Oracle Framework facilitates permissionless oracle deployments and flexible on-chain oracle feeds, enabling users to even create their own price logic. By allowing developers to create their price feeds and oracles, data can be brought on-chain from any API source.
According to the project, this is especially important for L2s, where gas fees are low and so large signer sets and feeds can be created for real-time price sources.
The framework also incentivizes oracles to monetize their efforts encouraging them to charge a small fee in ETH for subscriptions. Users then look for the best feed based on price, thereby creating an open oracle marketplace and revenue model which allows projects to quickly bootstrap feeds they need from providers.
Conjure says it is also experimenting with contracts that can trade based on feeds which will provide access to complicated technical indicators as a use case for the protocol.
Still, the aim of the game has been allowing anyone to create an oracle, even those with minimal knowledge and time.
“We believe that allowing non-technical users to bring assets onto Ethereum and L2s, as well as provide data for those assets, will allow these networks to process transaction volumes matching that of the largest financial exchanges in the world,” they said.
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