Everyone can use the protocol to mint synthetic assets against supported collaterals (aka over-collateralized loan), which is used to secure your loan.
In layman's terms, you need to lock up assets of greater value as collateral for the opportunity to mint synthetic assets. Remember to keep in mind that you need to ensure your Adequency Ratio remains above 1 to avoid a loan default. If the value of your collateral assets falls, you must top up your collateral assets or pay back some of your loan to avoid a liquidation.
Click here for a hand-on guide on how to mint dForce synthetic assets.
Types of supported collateral
Different types of dForce synths take different assets as collaterals:
dForce Lending: assets deposited onto dForce Lending can be used as yield-on collateral to mint core assets (multi-currency stablecoins and other core assets).
Multi-Currrency Stablecoins: USX and EUX can be used as collaterals to mint each other (i.e. deposit USX to mint EUX, or vice versa), other core assets (xBTC, xETH), and all synths stocks (xTSLA, xAPPL, xAMZN, xCOIN).
Other Core Assets: xBTC and xETH can be used as collaterals to mint each other (i.e. deposit xBTC to mint xETH, or vice versa), or multi-currency stablecoins (USX, EUX).
Synths Stocks: can not be used as collateral.
How do you feed price for dForce synthetic assets?
dForce integrate with Chainlink to bring the price of real-world stocks on-chain for minting and burning of synthetic assets through the protocol. However, trading of synthetic assets on decentralized plaforms may produce a price variance, making it possible for speculative investors to arbitrage from the trade.
Currently, we charge 3% APY for the mintage of synthetic stablecoins (USX, EUX) only, with interest calculated and accrued on a per block basis. Minting other synthetic assets are completely free of charge on dForce.
Again, fee schedule and future use of collected fees (i.e., buyback of DF or redistribute to DF holders) from synthetic stablecoin loans can be decided and adjusted via governance proposals.
How to burn dForce synthetic assets?
When a loan is repaid, dForce synthetic assets of corresponding value are burned and you are able to get back your collateral assets (return dForce synthetic assets in exchange for collateral assets).
Click here for a hand-on guide on how to burn dForce synthetic assets.