User Guide

How Users Gain Asset Exposure in Own Protocol

What Is Exposure in Own?

In Own Protocol, users can gain synthetic 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 synthetic version of the asset on-chain

• Pay a floating interest rate to the liquidity providers (LPs)

• Receive the asset's price performance as if they held it

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

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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

3. Mint Synthetic Asset: The protocol mints synthetic tokens representing your exposure.

4. Pay Interest: Interest is deducted from your collateral balance over time.

5. Rebalance Daily: The value of your position is updated daily to reflect real-world price changes.

6. Top-Up When Needed: If the asset price rises or interest deductions reduce your collateral below the required ratio, you'll need to add more collateral.

7. 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.

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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.

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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

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Example: User Mints 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 $2,000 USDC as collateral (based on a 20% 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 6% annualized (approx. 0.016% daily)

• Interest is deducted from your collateral daily

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.

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Costs & Risks

Factor	Explanation
Floating Interest	Cost paid to LPs to maintain exposure, deducted from collateral
Collateral Monitoring	Required to avoid liquidation or rebalance rejections
Redemption Delay	12–48 hrs depending on market schedule
Market Volatility	Affects both your token value and collateral requirements

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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.

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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

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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