Ask or search…
Comment on page

Part II.

The Beauty of Decentralization and Competing Inside the SYMMIO Agreements Engine

Coming out of a discussion centered around a technical understanding of the inner workings of the SYMMIO project, the conversation shifts into an appreciation of the decentralized and competitive nature of this Web3 solution.
SYMMIO fosters a highly competitive and efficient environment where liquidity providers compete against each other to find the most effective ways to hedge their risk.
By doing so, end-users experience lower fees, greater asset offerings, and less price impact. This is the beauty of decentralization - ensuring power is distributed rather than concentrated in the hands of one counterparty.
Furthermore, this is how SYMMIO differentiates itself.
Taking inspiration from the existing financial world, the team explains how the SYMMIO project is not just about competing with other protocols in the Web3 space but is also about going head-to-head with behemoths of traditional finance, such as Binance. Despite its decentralized nature, the project is dedicated to providing a robust infrastructure akin to centralized exchanges but without compromising the principles of trustlessness and decentralization.
The essence of SYMMIO lies in its efficiency and competition, thanks to the multiple liquidity providers who act as intermediaries. These providers ensure market efficiency and create a highly competitive market environment, thus pushing down costs for end-users.
The difference between SYMMIO and other protocols, such as GMX, is clear. GMX, for example, cannot interact with centralized exchanges to hedge risk because of the permissionless nature of the contracts. The SYMMIO system, however, offers a network of intermediaries called "hedgers," who have the freedom to interact with centralized exchanges to manage risk.
To give a practical example, consider this scenario: When a user decides to go long on Bitcoin, the "hedger" takes a counter trade on a centralized exchange to ensure they remain delta neutral, thereby removing their exposure to the asset. This would be impossible in a permissionless system like GMX because the funds cannot be taken from the contract to be placed in a centralized exchange.

How SYMMIO Outperforms Its Competitors

Even in its nascent stage, SYMMIO already provides an attractive package for liquidity providers and traders. Despite starting with almost no liquidity, the protocol boasts lower fees, more asset offerings, deeper liquidity, and less price impact than its peers, like GMX and Gains.
In SYMMIO's architecture, liquidity providers or counterparties can hedge their risk on centralized exchanges, thereby being delta neutral and reducing the overall risk in the system. On the other hand, the end-users experience greater cost efficiency as they enjoy lower fees, a broader range of tradable assets, and minimal price impact.
As the team puts it, the system is trustless due to the decentralization of counterparties. If there were a single counterparty, it could dictate everything, leading to a fully centralized system. The decentralization of SYMMIO fosters competition and efficiency, ultimately benefiting the end user.
Last modified 4mo ago
All rights to the people (c) 2023 Symmetry Labs A.G.