Crafting Finance Academy

-Weekly Questions

1.What is synthetic asset?

Similar to traditional financial derivatives, which derive their value from other underlying assets like commodities, currencies, precious metals, stocks, or bonds, synthetic assets aim to achieve the same objectives without the necessity of holding the actual asset itself.

2.What is the forge?

The forge is the platform where user could stake their collateral tokens and then mint the Rafts(Synthetic assets).The initial collateral includes CRF, DOT, KSM, BTC and ETH, and the collateral rate depends on the variation of the collateral itself.

Assets synthesized by direct staking of collateral in the entire system can be fitted in to four different categories: stablecoins (RaftStable), simple synthetic assets (Raft), synthetic bonds (BondRaft) and smart synthetic assets (UnivRaft).

3.What is kingsman?

The kingsman is the decentralized exchange built for the Rafts, it uses the SDP(Sharing Debt Pool) to provide the liquidity. Users could exchange to any kinds of Rafts supported in the system in it, quick and without any slippage. And the SDP allows users to provide liquidity by joining into the SDP. Once a user joining into the SDP, he/she will be assigned a fixed debt ratio which is the ratio of the value of the user’s synthetic assets to the value of all synthetic assets in the entire system. “Fixed” means this ratio will not change due to changes in asset prices, and will be used to calculate the user’s profit and loss. This ratio will only change when a new user mints new asset or an existing user destroys existing assets.