cypher protocol: decentralised synthetic asset protocol for price and demand discovery in nascent markets


Cypher is a decentralised synthetic asset protocol built on top of the Solana blockchain. The protocol will allow for the minting and trading of synthetic assets (traded directly in a peer-to-peer manner, via the platform interface, or via other Dapps in the Solana ecosystem in the future) that are derivatives of another (off-chain) asset. These synthetic assets will be collateralized by $USD denominated stablecoins such as USDC. Once stablecoins are locked, the contract will allow for the issuance of a synthetic asset (cAsset). Cypher protocol will initially support the minting of synthetic assets tied to late-stage private companies. Minters are incentivized to lock stablecoins into the protocol by receiving a pro-rata portion of the fees generated by the particular market they are helping to create. These cAssets will be tradable via the Cypher platform, which leverages order book methodology allowing the platform to bring true price discovery forward. The protocol will mimic certain mechanisms from traditional finance enabling traders to have long, short, and leveraged positions. Short and levered positions will be enabled by a peer-to-peer lending pool where traders can come to lend and borrow synthetic assets and stablecoins. In addition to the collateral locked in by minters, traders will have to maintain an over collateralized margin account, helping ensure protocol safety.
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