Sounds a lot like a "synthetic asset" which is constructed from derivatives rather than the other way around. Actually I think that is what it is, but I'll have

Sounds a lot like a "synthetic asset" which is constructed from derivatives rather than the other way around. Actually I think that is what it is, but I'll have to read the PDF to be sure. Synthetic assets are very much vulnerable to manipulation by whales. Ultimately you are just providing some incentive structure to keep the small players honest, and hoping that the small-bit players add up to significant security in aggregate, more than any possible combination of colluding players. Generally speaking that's not a very safe assumption to make, particularly when the underlying settlement medium is irrevocable.