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> It wasn't buying an equity, it was buying a token that was the same price as the equity. Buying the token had no effect on the upward price of the equity Sou
by oldgradstudent 4y ago
> It wasn't buying an equity, it was buying a token that was the same price as the equity. Buying the token had no effect on the upward price of the equity
Sounds like a derivative to me. That is also a type of security.
- latchkey 4y agoThe mirror documentation [1] calls it a 'synthetic asset'. This mechanism is also how they also offered BTC and ETH on their network (as mBTC and mETH). To be clear, I wasn't trying to debate the nature of if it is a security or not. [1] https://docs.mirror.finance/ https://docs.mirror.finance/
- r00fus 4y ago"synthetic asset" and "derivative" sound like Venn-diagram that's just a circle.
- subroutine 4y agoReminds me of the scene in The Big Short where Baum learns about synthetic CDOs. https://www.youtube.com/watch?v=A25EUhZGBws&t=111s https://www.youtube.com/watch?v=A25EUhZGBws&t=111s
- dogma1138 4y agoSynthetic in finance just means a combination of two or more products/calls etc. So if you make a financial product that encompasses two different derivatives it would be a synthetic derivative. It’s mostly a meaningless term as far as regulation goes.
- exdsq 4y agoFWIW when I was doing some banking courses, as I was working in DeFi and wanted to know more about CeFi, they have synthetic assets too. Which are derivatives. In fact in the Big Short movie I'm 100% they call derivates synthetics!
- ymolodtsov 4y agoThese are a bit different. Derivatives is a complex product based on more fundamental products. Synthetic product is what it sounds like, stocks are a great example. You can create a synthetic stock with the same price as the real one and let people trade it.