XCarnival, New Generation Synthetic Assets in DeFi. Synthetic assets are essentially a type of derivative in the virtual world. They too ‘derive’ the value of the assets’ actual equivalents in the real physical world, however, they do so without actually having those assets in their hold. This means that all speculation and trading is done on a digital sphere. This is also where the DeFi system comes into play. Since the commodities in question are not actually acquired, equivalents of those very commodities are made in the block chain network. This could be anything from gold, oil, etc. All you really need is a good number of people ready to speculate upon future prices. Coming to why these synthetic asset tokens are on the rise. They decrease the costs involved in funding. They make the trade of financial assets far more accessible and hence, increase market efficiency. You can literally trade any asset you want! Like derivatives, they considerably reduce the risks involved in certain traditional financial sales. They promote injection of liquidity into the market. In short, they are a much more modernised way of entering the trading arena. Whilst speculation is the main game here, there ought to be people who are ready to speculate in the first place.