FAQ's

Why can’t I just mint tokens immediately?

In Own, you're not simply opening a position but minting synthetic tokens that are always fully backed by USDC at the token’s current market value. To maintain this guarantee, the protocol uses rebalance cycles that align with traditional market days. During these cycles, liquidity providers manage their offchain hedges and help rebalance the pool to ensure full collateralization. Processing deposits and redemptions in coordinated batches during these periods makes it easier for LPs to stay delta neutral and manage their exposure effectively.

Why is Own better than Synthetix?

1. Better Incentive Model One major issue in Synthetix is misaligned incentives for the synthetic asset markets. LPs earn money through trading fees when they back an asset, but since most synthetic assets end up being traded on secondary markets like Uniswap, LPs take on risk without capturing corresponding fees, making the incentive model ineffective.

Own introduces a floating interest rate paid by users who mint synthetic assets. LPs earn this interest instead of trading fees. As pool utilization increases, the interest rate goes up, similar to how Aave adjusts borrowing costs, which encourages more LPs to join based on demand. Additionally, LPs in Own earn through active market making and rebalancing as well.

2. Hedging

Another core issue in Synthetix is hedging. LPs are left short when users mint assets, and they're expected to hedge externally if they want to stay delta-neutral. But for real-world assets like stocks, markets are closed nearly half the time. Letting users mint 24/7 while the underlying is only tradable during market hours creates unhedgeable risk.

Own fixes this by allowing mints and redemptions only during active windows. This makes it significantly easier for LPs to manage their hedges and maintain a delta-neutral position.

Why is Own better than Mirror Protocol?

Mirror allows users to mint synthetic tokens by depositing collateral, but to actually make money they've to be net short the underlying asset. This model creates a mis-aligned incentive structure for those who want to bring stocks onchain. In contrast, Own creates a market where users gain long exposure while LPs take on the role of being delta neutral. This structure creates a healthier and more sustainable market dynamic.

Why is Own better than Backed Finance?

Backed Finance issues tokenized stocks onchain but does so through a centralized entity. While this brings traditional assets to blockchain environments, it also introduces reliance on a single company and its regulatory permissions. Own takes a fundamentally different approach by offering a decentralized and permissionless protocol for synthetic stocks. This ensures that anyone can mint synthetic assets without needing approval from a central party, reducing dependency and aligning more closely with the principles of decentralization and censorship resistance.

How much interest do I end up paying for minting synthetic stocks?

In Own, your USDC deposit earns interest through protocols like Aave. The protocol sets its base interest rate roughly 3 percent higher than the Aave yield, which means your net cost is usually around 3 percent annually. If you choose to LP your minted synthetic asset in secondary markets like Uniswap, you may actually earn more in trading fees than you pay in interest while still staying long the asset. In such cases, you can end up net positive rather than incurring a borrowing cost.