Injective has launched a new financial primitive, iAssets, that facilitates on-chain trading of real-world assets like stocks, commodities, and currencies. These assets offer programmable financial instruments with high liquidity and capital efficiency.
Challenges in Traditional and Early DeFi Systems
Traditional finance is often characterized by a high degree of centralization, slow settlement processes, and capital restrictions, leading to high costs and inaccessibility for a broad audience. Early attempts to bring financial instruments on-chain through synthetic assets faced issues of excessive collateralization and systemic fragility.
What Are iAssets and How They Work
iAssets represent an innovative approach to creating on-chain derivatives of real-world assets. Leveraging Injective’s specialized infrastructure, they enable dynamic liquidity provisioning and real-time trading. The system involves three key components: the Oracle Module for price sourcing, the Exchange Module for market creation on a decentralized exchange, and liquidity management.
Advantages of iAssets Over Traditional Models
iAssets eliminate the need for over-collateralization, characteristic of earlier financial assets, offering more efficient capital deployment. These assets are available for round-the-clock trading, highly composable with financial applications, and provide transparency due to on-chain technologies.
Injective's iAssets provide significant enhancements over traditional and early DeFi systems, offering solutions to accessibility and capital efficiency issues, opening new avenues for on-chain trading and real-asset utilization.
