How Synthetix Will Launch "Tesla & SpaceX" Synthetic Assets Without Prices – How Are They Priced?
TechFlow Selected TechFlow Selected
How Synthetix Will Launch "Tesla & SpaceX" Synthetic Assets Without Prices – How Are They Priced?
Can Synthetix successfully mint Tesla (Tesla) and even SpaceX—which is neither publicly listed (and thus has no real market price) nor officially endorsed for tokenization by its founders—into on-chain synthetic assets and expand the market?
Navigating Web3 tides with focused insightsSynthetix is a centralized synthetic asset issuance protocol built on Ethereum. Within the Synthetix protocol, users can mint, hold, and trade a wide variety of synthetic assets, including fiat currencies, commodities, stocks, and synthetic versions of cryptocurrencies such as Bitcoin and LINK.
"Synthetic assets" generally refer to derivatives settled in non-physical form. On the Synthetix platform, derivatives of certain assets can be synthesized, with derivative prices moving either positively or inversely relative to the underlying asset's price. Thus, holders of synthetic assets can gain exposure to price movements of the underlying assets.
Synthetix provides a platform that brings traditional assets onto Ethereum, enabling anyone to own and trade derivatives of these assets on the platform.
Holding a synthetic asset differs from holding the actual asset. For example, the price of a synthetic MKR token matches that of the "real" MKR token, but holders of the synthetic version do not receive voting rights granted to actual MKR token holders.
The system allows users to speculate on asset prices without owning the actual assets.
In short, Synthetix enables users to synthesize various on-chain assets by over-collateralizing SNX tokens.
How Are Prices Determined?
As a protocol that synthesizes on-chain assets based on the prices of real-world assets, one of Synthetix's core requirements is the ability to obtain accurate data from the "outside world," such as the price of the Japanese yen or Tesla stock.
But SpaceX, being a private company, does not have an actual market valuation—how then should its price be determined on Synthetix? Would a synthetic SpaceX asset hold value without the endorsement of founder Elon Musk?
Being the first synthetic asset on DeFi for which no real-world market price exists, setting its price may be challenging—but not impossible. We must estimate changes in SpaceX's profitability:
Assume each rocket launch costs at least $70 million. Based on Wikipedia’s projected annual launch volume for SpaceX, this implies yearly expenditures of approximately $2 billion.
Next, since there are no real-world SpaceX shareholders, shareholder voting rights would temporarily belong to holders of the synthetic SpaceX asset. These holders would need to act as a jury, using a specific formula to determine price adjustments—increasing the price by X upon successful rocket launches, or decreasing it by X upon launch failures.
This could simplify price discovery, but the profit impact of each launch would heavily depend on the quality of community governance.
Given Musk's previous tendency to embrace public attention, perhaps when the market begins to take shape, he might be willing to disclose more details about SpaceX, making price determination significantly more accurate.
Future Development of the SpaceX Synthetic Asset
Once SpaceX goes public, official pricing APIs could be used. But until then—and before a full valuation and pricing ecosystem is established—the synthetic asset remains just a string of code running on Ethereum, and its market acceptance is currently unpredictable.
Earlier reports indicated that on July 14, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) fined Abra—an app allowing users to invest in synthetic assets of traditional markets—highlighting the current lack of regulatory optimism toward synthetic asset trading services in the United States.
If Musk shows interest in the SpaceX synthetic asset and successfully coordinates with the SEC to launch it, given SpaceX's leading position in innovative industries, this would represent a major leap forward for the direct tokenization of pre-IPO assets.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
