> For the complete documentation index, see [llms.txt](https://own-protocol.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://own-protocol.gitbook.io/docs/buy-side-mint/buy-side-guide.md).

# Buy-side Guide

## How Buy-side Users Gain Asset Exposure in Own Protocol

### What Is Exposure in Own?

In **Own Protocol**, users can gain exposure to real-world assets like stocks by entering into a Total Return Swap (TRS) with the protocol.

Instead of buying the asset directly, users:

* **Mint a tokenised version** of the asset on-chain
* **Pay a floating interest rate** to the sell-side liquidity providers
* **Receive the asset's price performance**

This allows users to speculate or hedge without needing to use a traditional broker or hold the real-world asset.

***

### How It Works

#### Step-by-Step:

1. **Choose an Asset Pool**: Select an asset you want exposure to (e.g., TSLA).
2. **Deposit Funds**: Provide two components:
   * **Deposit amount** — the capital representing the asset exposure
   * **Collateral** — a buffer used to pay the floating interest (Collateral requirements will be 2% of deposit amount)
3. **Mint Synthetic Asset**: The protocol mints synthetic tokens representing your exposure.
4. **Pay Interest**: Interest is deducted from the yield that stablecoins generate in the pool, along with 1% paid from the collateral balance.
5. **Rebalance Daily**: The value of your position is updated daily to reflect real-world price changes.
6. **Redeem During Active Cycles**: You can make deposit or redemption requests only during the pool's active cycle. Claims are processed after LPs perform rebalancing.

***

### Important Mechanics

* The pool operates in **cycles** aligned with market days.
* Users can only **initiate deposits or redemptions during the active period** of a cycle.
* **Rebalancing occurs only on market days**. This introduces a **12–48 hour delay** in redemption processing depending on whether it’s a weekday or weekend.
* **Claiming** your synthetic asset or reserve token happens only after the pool is rebalanced.

***

### What You Gain

| Benefit                 | Description                                                |
| ----------------------- | ---------------------------------------------------------- |
| **Price Exposure**      | You gain upside/downside of the asset’s price              |
| **Capital Efficiency**  | No need to fully buy the asset                             |
| **Onchain Simplicity**  | Trade with your wallet, no broker needed                   |
| **Global Access**       | Permissionless, accessible to anyone                       |
| **Asset Composability** | Minted tokens are standard ERC-20s usable across DeFi apps |

***

### Example: Minting Synthetic TSLA

Let’s say you want exposure to **TSLA**, currently priced at **$100**.

#### Step 1: Mint

* You deposit **$10,000 USDC** as the deposit amount
* You also deposit **$200 USDC** as collateral (based on 2% collateral ratio)
* You mint **100 synthetic TSLA tokens**

Now you hold 100 tokens that track TSLA price.

#### Step 2: Pay Interest

* Pool utilisation is 52%
* Based on that, your floating interest rate is 5% annualized (approx. 0.016% daily)
* Interest is deducted primarily from the stablecoin yield. The additional amount needed will be deducted from your collateral.

#### Step 3: Price Moves

**Case A — TSLA goes to $130**

* Your synthetic tokens are now worth `$130 × 100 = $13,000`
* You earned **$3,000** in price appreciation
* You paid \~$1.60 × N days in interest from collateral

**Case B — TSLA drops to $90**

* Your synthetic tokens are now worth `$90 × 100 = $9,000`
* You’ve lost **$1,000** in asset value
* Interest continues to deduct from your collateral

You can redeem or hold based on market view. Redemptions will be processed post rebalancing, subject to cycle constraints. When you redeem you receive the reserve tokens based on the current price of the asset + the balance collateral after interest deductions.

***

### Costs & Risks

| Factor                         | Explanation                                               |
| ------------------------------ | --------------------------------------------------------- |
| **Minting & Redemption Delay** | \~6hrs - Depending on market schedule                     |
| **Market Volatility**          | Affects both your token value and collateral requirements |

***

### Protocol Design Philosophy

Own isn’t just about synthetic exposure — the core idea is to build a **protocol where tokens are fully backed off-chain**. It's closer to a decentralized, tokenized stock protocol than a traditional synthetic asset system.

To support this:

* LPs are expected back the pools by holding the actual asset off-chain
* We will introduce **optional zk-proof-based verification** for LP asset holdings.

***

### Summary: Should You Use Own?

Use Own Protocol if you want to:

* Gain exposure to real-world assets without a broker
* Operate entirely on-chain using just your wallet
* Trade ERC-20 asset tokens freely across DeFi
* Speculate or hedge with capital-efficient strategies

But be mindful of:

* Floating interest and collateral top-ups
* Delay between request and actual redemption

***

### TL;DR

| Feature                 | What It Means                                            |
| ----------------------- | -------------------------------------------------------- |
| **Synthetic Exposure**  | Get the performance of real assets like TSLA on-chain    |
| **No Broker Needed**    | Mint, hold, and redeem with your wallet                  |
| **Interest Deduction**  | Paid from collateral                                     |
| **Cycle-Based System**  | Redemptions processed only after market-day rebalances   |
| **Fully Backed Vision** | Protocol prioritizes real-world backing for asset tokens |