Synthetic crude oil tokens are now live on Synthetix
Traders can now long crude oil futures with sOIL or short them with iOIL
DeFi derivatives trading platform Synthetix just announced the launch of two synthetic crude oil tokens. These are namely sOIL, which allows traders to take a long position, and iOIL, an Inverse Synth which allows traders to take a short position and has upper and lower limits that cap profit and loss.
As oil price is determined by the individual contracts with varying expiry dates which make up the futures market, finding a single reference price for the Synth posed a challenge. To this end, Synthetix partnered with Chainlink, whose decentralised oracle network means that raw oil data from numerous contracts in the futures market can be aggregated. This enabled the development of a non-expiring Crude Oil Index based on the prices of Intercontinental Exchange (ICE) Brent Crude Oil futures.
Chainlink technology seems to be in high demand at the moment – yesterday also saw announcements that their oracles would be used by xBTC to create a spot price for Bitcoin Market Cap Dominance (BMCD), as well as Bondly to accurately price digital assets on its e-commerce platform.
sOIL is now live on the Synthetix exchange and the Synthetix-powered derivatives trading dApp Kwenta. Users can trade sOIL for any Synth with zero slippage and infinite liquidity, and also trade on its future price by setting up binary options markets with sOIL.
Synthetix said in a Twitter thread yesterday “The launch of sOIL represents the future of decentralized finance — more and more of the traditional market will soon be accessible through Synthetix, and our integration with Chainlink allows us to continually tap into high-quality data providers to provision new assets.”
Indeed, the same method can be applied to many other assets with large futures markets, including coffee, wheat, platinum and much more. Synthetix believes that cryptocurrency traders will soon be able to gain exposure to a more varied range of assets across many different industries without having to leave their cryptocurrency wallet. They are currently surveying customers to help them decide which asset Synthetix should add to the available Synths next.