Sei Network-based (SEI) community-led decentralized finance (DeFi) platform Jellyverse is launching its own synthetic assets protocol, jAssets.
According to a Jan. 21 announcement, jAssets will allow users to mint their own synthetic asset tokens that would approximately track the value of traditional assets. The value of those tokens would be tied to real-world assets like stocks, commodities and precious metals.
Jellyverse moved ahead with the implementation of the new feature following a proposal seeing a positive outcome in an integration vote by the protocol’s decentralized autonomous organization (DAO.) Minting jAssets by locking up crypto as collateral allows for on-chain portfolio diversification.
Benedikt Keck, co-founder at Jellyverse developer Blkswn, explained that the new product will allow for “portfolio diversification in DeFi by offering a range of innovative investment strategies, including long, short, and leveraged positions.” The new synthetic assets protocol also allows for multi-collateral troves, with support for “wETH, wBTC, JLY, SEI, USDC, USDT, FRAX or GEM or a combination of these assets as collateral,” he explained.
Jellyverse relies on decentralized oracles and over-collateralization to ensure that the value of the collateral exceeds the synthetic assets and prevent the protocol from losing assets. The oracles in question are based on Pyth Network (PYTH).
A blockchain oracle is a tool or service that feeds external, real-world data into a blockchain so smart contracts can act on it. Usually, data that is external to blockchains cannot be accessed in the smart contracts that govern the DeFi space.
Oracles serve as a bridge providing up-to-date data — in this case real-worAld asset pricing data. This bridge is also a potential centralized point of failure in a decentralized system, which is why a lot of effort has been dedicated to developing decentralized oracles such as Chainlink (LINK) and Pyth Network.
Jellyverse runs on the Sei Network, a layer one blockchain with parallel Ethereum Virtual Machine (EVM) execution. This allows the smart contracts that the DeFi space relies on to run much faster and allow for faster trades.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.