Narwhal.Finance

Flying Narwhal wanna bring peace and health through the digital deep sea

Inspiration

Synthetic assets provide a mechanism for traditional assets to live on blockchain in a decentralized and permission less fashion. With Defi blooming, there are derivative tokens providing exposure to a range of assets, such as foreign currencies, indices, etc. We are now trying to cover more equity assets, providing investors alternative ways in trading and asset allocation.

What it does

Narwhal.Finance is a synthetic asset protocal that grants price exposure to Indices and ETFs. Through Narwhaled Assets (nAssets), We plan to develop on Neo N3 blockchain where investor could utilize his/her cryptocurrency assets to access synthetic assets including both traditional and crypto assets. The Narwhal Token (NAR) will be distributed as a reward and voting privileges to secure the ecosystem.

How we built it

We'd like to incorporate some newest technologies (such as AMM/Algo of both traditional and crypto markets) into the trading mechanism while focus on collateral diversification and nAssets tracking error. We'll launch an actively managed ETF relevant Fund that provides liquidity at the beginning and seeks medium-term growth of capital by investing in ETFs with trend-following, arbitrage strategies. Once users deposit collateral, they’ll obtain minted NAR through providing liquidity. Narwhal ensures sufficient collateral ratio to cover nAssets, and also manages markets for nAssets by listing them on Neo N3 against fUSDT.

Challenges we ran into

The main challenge was the liquidity of synthetic assets. We had three ways to improve the situation. 1) To begin with, we chose assets with high liquidity and provide seeding money in real world. Then we expand to less popular assets. 2) To better incentivize users who provide liquidity, we'll try to apply for FLM Reverse Pool. 3) To lower the trading cost, avoid slippage and delays, we may invite some senior traders to join.

Accomplishments that we're proud of

In addition to stocks and indices, we are working on connecting cryptocurrency assets to complex real-world equity assets, such as ETFs and Index Funds. That will be better improvement of synthetic assets family. Having enough liquidity and influence, the investors would have more tools chosen for their portfolio.

What we learned

During the project, we were aware that we can synthetic as many as equity assets in real world. In theory, we are able to cross the exchange market through traditional, CEX, DEX... We also learned how to leverage between liquidity and security by setting appropriate collateral ratio. Besides, we got experience in designing trading mechanism like AMM, etc.

What's next for Narwhal.Finance

1) Improve trading mechanism, aiming at reducing tracking error and trading cost. 2) Design active trading strategies in order to seek growth of capital.