Technical Guide: Synthetic Asset Creation on CrossFi Chain & xAssets

The CrossFi ecosystem is revolutionizing decentralized finance (DeFi) by bridging traditional financial systems with blockchain technology. At the heart of this ecosystem lies xAssets, a decentralized platform for minting, trading, and swapping synthetic tokens that represent real-world assets like stocks, commodities, or currencies. This technical guide dives into the mechanics of xAssets on the CrossFi Chain, exploring its architecture, smart contract workflows, and tools for developers building DeFi applications.

What Is xAssets?

xAssets is a decentralized protocol on the CrossFi Chain, a Layer-1 blockchain with Ethereum Virtual Machine (EVM) compatibility and Cosmos SDK integration. It enables users to create synthetic tokens—digital representations of real-world assets—backed by over-collateralized pools of tokens. These tokens unlock access to financial instruments traditionally confined to centralized markets, such as margin trading and options, all within a non-custodial, blockchain-based environment.

Key Features:

• Synthetic Tokens: Represent assets like gold, Apple stock, or fiat currencies, enabling exposure without owning the underlying asset.

• Over-Collateralization: Ensures stability by requiring collateral to exceed the value of minted tokens.

• Real-Time Oracle System: Provides accurate price feeds for asset management and trading.

• DeFi Integration: Supports advanced financial strategies like margin trading and options.

Technical Architecture of xAssets

xAssets operates on the CrossFi Chain, which leverages a modular architecture combining Cosmos SDK for interoperability and Tendermint for consensus, alongside EVM compatibility for Ethereum-based smart contracts. This setup ensures high throughput (up to 50,000 transactions per second), low fees (as low as $0.02), and block times of ~5 seconds, making it ideal for real-time financial applications. Core Components:

• Smart Contracts: Written in Solidity, xAssets smart contracts handle token minting, trading, and liquidation. They are deployed on the EVM-compatible CrossFi Chain, ensuring compatibility with Ethereum tools like Remix and Hardhat.

• Oracle System: Integrates with external price feeds (e.g., Chainlink or custom oracles) to provide real-time market data for synthetic assets.

• Collateral Pools: Over-collateralized pools of tokens (e.g., XFI, stablecoins) back synthetic assets to mitigate volatility risks.

• Non-Custodial Framework: Users retain control of their funds via wallets like MetaMask, with transactions secured by CrossFi’s PCI DSS-compliant infrastructure.

How xAssets Works: Step-by-Step

Here’s a technical breakdown of the xAssets workflow for minting and trading synthetic tokens: Minting Synthetic Tokens: Collateral Deposit: Users deposit collateral (e.g., XFI or USDC) into a smart contract. The collateral must exceed the value of the synthetic asset by a predefined ratio (e.g., 150%) to ensure stability.

• Smart Contract Execution: A Solidity-based smart contract mints a synthetic token (e.g., xGOLD for gold) based on the collateral. The contract queries the oracle for the asset’s current market price.

• Example: Solidity

// SPDX-License-Identifier: MIT pragma solidity ^0.8.0;

contract xAssetsMint { address public oracle; mapping(address => uint256) public collateral; uint256 public collateralRatio = 150; // 150% collateralization

function mintSynthetic(address user, uint256 amount, string memory asset) external { uint256 assetPrice = getPriceFromOracle(asset); uint256 requiredCollateral = (amount assetPrice collateralRatio) / 100; require(collateral[user] >= requiredCollateral, "Insufficient collateral"); // Mint synthetic token logic }

function getPriceFromOracle(string memory asset) internal view returns (uint256) { // Oracle price feed integration return 1000; // Example price in USD } }

• Outcome: The user receives xGOLD tokens, representing gold’s value, while the collateral is locked in the contract.

Developer Tools and Integration

Developers building on xAssets can leverage CrossFi’s robust infrastructure:

• Alchemy APIs: Provide node access, transaction monitoring, and debugging tools for dApp development.

• EVM Toolchain: Use Solidity, Remix, or Hardhat to write and deploy smart contracts. CrossFi’s EVM compatibility ensures seamless integration with Ethereum-based libraries.

• Testnet Environment: Developers can deploy and test xAssets-based dApps on the CrossFi EVM Testnet, earning XFT token rewards for contributions.

• Sample Workflow for Developers: Set Up Environment: Configure MetaMask for the CrossFi EVM Testnet and connect to Alchemy nodes.

• Write Smart Contract: Use Solidity to create a synthetic asset minting or trading contract, integrating oracle price feeds.

• Test and Deploy: Test on the CrossFi Testnet, ensuring compatibility with MPX and xAssets protocols.

Use Cases and Applications

xAssets enables a range of DeFi applications:

• Portfolio Diversification: Users can gain exposure to assets like gold or tech stocks without leaving the blockchain.

• Global Accessibility: Traders in emerging markets can access financial instruments traditionally limited to centralized exchanges.

• Hedging and Speculation: Options and margin trading allow users to manage risk or amplify returns.

Getting Started with xAssets

• To build or interact with xAssets: Access the CrossFi App: Download from crossfi.org to create a wallet and deposit collateral.

• Mint Synthetic Tokens: Use the xAssets interface to mint tokens like xGOLD or xUSD.

• Trade and Manage: Swap tokens on MPX or engage in margin trading via the xAssets dApp.

Conclusion

xAssets on CrossFi Chain is a powerful platform for creating and trading synthetic assets, blending the accessibility of traditional finance with the transparency of DeFi. Its high-performance architecture, EVM compatibility, and robust security make it an ideal choice for developers and users alike. By enabling real-time asset tokenization and advanced trading strategies, xAssets is paving the way for a decentralized financial future. Start exploring xAssets today, and build the next big DeFi dApp on CrossFi Chain.