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3. Advanced Course

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  1. 1. What is Taproot?
  2. 2. Blockchain bridges – what are they?
  3. 3. What is the 51% attack on blockchain?
  4. 4. Zero-knowledge proof – a protocol that respects privacy 
  5. 5. What is EOSREX?
  6. 6. Mirror Protocol – what it is? 
  7. 7. What is DAO, and how does it work?
  8. 8. What is spoofing in the cryptocurrency market? 
  9. 9. What is digital property rights in NFT?
  10. 10. How to verify a cryptocurrency project – cryptocurrency tokenomics 
  11. 11. What is Ethereum Plasma?
  12. 12. What is Ethereum Casper?
  13. 13. What is Selfish Mining? 
  14. 14. How to create your own NFT? 
  15. 15. Schnorr signatures - what are they? 
  16. 16. What is Zk-SNARK and Zk-STARK? 
  17. 17. What is Proof of Elapsed Time (PoET)?
  18. 18. MimbleWimble - what is it? 
  19. 19. What are ETFs and what role do they play in the cryptocurrency market? 
  20. 20. What are synthetic assets? 
  21. 21. Definition of DeFi, and what are its liquidations?
  22. 22. New identity system - Polygon ID
  23. 23. What is Ethereum Virtual Machine (EVM) and how does it work?
  24. 24. Ethereum Foundation and the Scroll protocol - what is it?
  25. 25. What is Byzantine fault tolerance in blockchain technology?
  26. 26. Scalability of blockchain technology - what is it?
  27. 27. Interchain Security - new Cosmos (ATOM) protocol
  28. 28. Coin Mixing vs. Coin Join - definition, opportunities, and threats
  29. 29. Soulbound Tokens - what are they, and how do they work?
  30. 30. Definition of LIDO - what is it?
  31. 38. What is Web3 Infura?
  32. 39. Mantle - Ethereum L2 scalability - how does it work?
  33. 40. Polygon zkEVM - everything you need to know
  34. 41. What is Optimism (OP), and how do its roll-ups work?
  35. 42. What are RPC nodes, and how do they work?
  36. 43. SEI Network: everything you need to know about the Tier 1 solution for DeFi
  37. 44. Types of Proof-of-Stake Consensus Mechanisms: DPoS, LPoS and BPoS
  38. 45. Bedrock: the epileptic curve that ensures security!
  39. 46. What is Tendermint, and how does it work?
  40. 47. Pantos: how to solve the problem of token transfer between blockchains?
  41. 48. What is asymmetric encryption?
  42. 49. Base-58 Function in Cryptocurrencies
  43. 50. What Is the Nostr Protocol and How Does It Work?
  44. 51. What Is the XDAI Bridge and How Does It Work?
  45. 52. Solidity vs. Rust: What Are the Differences Between These Programming Languages?
  46. 53. What is a Pinata in Web 3? We explain!
  47. 54. What Is a Real-Time Operating System (RTOS)?
Lesson 20 of 47
In Progress

20. What are synthetic assets? 

The synthetic assets to be discussed today are often colloquially referred to as synthetics.  They are a combination of traditional cryptocurrencies and derivative assets. Synthetics, in short, are tokenised other derivatives. What they are, how they are created – we will explain everything in today’s lesson. Get to it! 

What are synthetic assets? 

They are closely related to the blockchain. They are a wholly new form of digital asset,  catering to the needs of a fairly large group of users. How? We answer with an example. In traditional finance, derivatives represent stocks or bonds to us. You are an investor in them,  but you do not own them at the same time. You want to buy and sell them – preferably at a  profit. To achieve this, you require the help of a derivative asset. 

Synthetic assets are just such a derivative asset. We see them becoming increasingly popular in the cryptocurrency world. They allow investors to make money from the fluctuations of various tokens and cryptocurrencies, without having to hold them in their  wallet. How does this happen? Synthetic assets create a ‘record’ of a derivative on the blockchain and make a corresponding cryptocurrency token for it. This is an excellent solution, especially for DeFi enthusiasts, as it gives investors far more options. 

How do they work? 

They bind the value of an already existing asset and create a token for it on the blockchain.  This gives investors the ability to easily trade virtually anything on the blockchain.  Additionally, synthetic assets provide great security and traceability. And, as we have a  blockchain, we also have full anonymity – an additional advantage of transactions made with synthetic assets. 

Synthetic asset exchanges 

Synthetic assets are developing alongside modern DeFi solutions. New synthetic exchanges are springing up, providing even more trading flexibility and lower gas fees. Among the most popular and largest is Synthetix. It is the first exchange personalised for synthetics. In second and third place are Cream Finance and MarkerDAO

Advantages of synthetics 

Ease of creation. We can prepare such assets ourselves, using, for example, the  Ethereum blockchain. 

They are easy to use and intuitive. In addition, they are characterised by  marketability. 

∙ We do not need to have an underlying asset in the portfolio to move freely between assets. 

∙ They are also characterised by so-called infinite liquidity. 


Synthetic assets – whether in traditional finance or in the cryptocurrency industry, have a  giant impact on trading and investment. Using them, we can profit from transactions without even owning the underlying assets. They are also becoming a significant part of DeFi. So it is not surprising that they have as many supporters as sceptics. The only thing left for us to do is to follow the developments in this sector.

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