The Synchrony Origin Story
Written by Maurice Chalfin, CMO @ Synchrony
Life is complicated and, you guessed it, DeFi is no different!
There are people who can afford to spend countless hours accessing wallets, switching between protocols, depositing into liquidity pools, learning how to execute complicated strategies, all while discerning the “signals from the noise”. And then there are those who want a simple solution: somewhere to park their assets and not have to think about it.
A common thread among many participants in DeFi is their desire to optimize their strategies and trades, to streamline their workflow, and to reduce the associated cognitive overhead.
Synchrony is that solution – the first on-chain copy-trading and composable indexing protocol facilitated by a friendly Solana marketplace and explorer.
So you’re asking yourself:
Why Synchrony? What sets us apart? Why are we building this? And why on Solana?
In order to best answer these questions, let me introduce Synchrony’s co-founders, Andrew Fraser and Andy Keh.
Andy Keh is a serial entrepreneur and full-stack developer. His first foray into cryptocurrency was with Bitcoin in 2010 while researching cryptography for an R&D Directorship at a Berkshire Hathaway subsidiary (H.H. Brown). This led him down the path to eventually founding an alternative assets firm Sentience.
Andrew Fraser is a software engineer and algorithmic trader with a decade of experience designing and developing solutions for tier-1 financial institutions. He specializes in execution platforms and algorithmic portfolio optimization. Andrew was the architect of the execution platforms i-Invest for Ageas Insurance Company Asia (AICA) and Avenir | Wealth for Prive Technologies, also serving as their Strategic Director.
It was during “DeFi Summer 2020” when Andy started to dabble in DeFi and quickly found himself extremely profitable – because everyone’s a genius in a bull market. What had always been an interest, turned into a passion – days on end without sleep researching new protocols, yield farming strategies, and opportunities. It wasn’t till December that Andy would emerge from the reverse hibernation of full-time-DeFi, wallets overflow-ETH but with an obvious need for a few square meals. He sought a running partner to join him – to enmesh with the world that had profited him so well – that soul was Andrew.
Somewhat conscious of Andy’s need for more sustenance, and already successfully algo-trading FX and cryptocurrency himself, Andrew reasoned that there was no need for him to also sacrifice his love of food, nor his sanity, when his friend had found profitable formulas. And so Andrew wrote a bot to replicate all the transactions Andy was making, proportionally, in his own wallet.
This was the initial concept for Synchrony: on-chain copy-trading.
The astute among you may be wondering why Andrew didn’t just have Andy manage his assets for him? Well, what if the Bogdanoffs activated Andy’s mind-control implant and had him YOLO all of Andrew’s assets into one of the hundreds of vapor coins?
While absurd, this highlights some of the limitations of current on-chain asset management protocols – they often converge on a single point of failure – the manager. And where they don’t converge on a single point of failure, they impose overly restrictive limitations on the strategies a manager can implement.
But a naive implementation of on-chain copy-trading is ripe for abuse. And to impose limitations sort of defeats the purpose. And so if they couldn’t implement copy-trading naively, and Andrew was afraid of the Bogdanoffs, then what was the solution?
By distilling Andy’s approach, defining criteria for yield farming strategies and potential assets for investment, Andrew came to the conclusion that they could implement copy-trading safely and completely trustlessly by using indices with highly composable parameters.
An emergent feature from this solution was the ability to enable anyone to create such an index, whether it be to manage a portfolio, to create a pool for others to subscribe to or as originally intended – to evaluate suitable candidates for copy-trades.
And thus Synchrony was born – an on-chain automated portfolio and asset management protocol featuring copy-trading and dynamic composable indices. Empowering the user with the ability to evaluate sets of tokens, liquidity pools, strategies and other on-chain instruments so users can create algorithmically optimized and automatically rebalancing pools or portfolios.
Copy-trading leverages these indices enabling users to define the parameters for which a copy-trade is considered a candidate for execution. And utilizing Synchrony’s analytics and aggregation services, users are able to make informed decisions not only with respect to index and copy-trade parameters but also their entire on-chain behavior.
Facilitating these features is Synchrony’s front-end – featuring a marketplace that, along with the aforementioned suite of tools, enables users to interact with the entire Solana ecosystem.
Andrew built Synchrony to help ease his own transition into the world of DeFi, already having a prime specimen from which to draw examples.
But mostly, it was built for you, as each of you are represented in the way we interact with DeFi. And each of us is a composite of the varying trader and investor archetypes.
It is a tool to optimize your workflow and to streamline your DeFi experience. A place where people can learn from each other and build things for themselves and each other. It is a means to reduce DeFi’s barriers to entry. A realization of the ideology of DeFi and blockchain.
So now that you know Synchrony’s origin story and why we are building, why did we choose Solana? We chose to build Synchrony on Solana for multiple reasons.
We believe in Solana, and Solana affords us the opportunity to do so.
Expeditious execution is necessary for copy-trading. Pools pegged to a crypto-based index need to rebalance on a much more frequent basis than their counterparts in traditional finance, such as the S&P 500. But cryptocurrencies and instruments derived from cryptocurrencies are, for the most part, incredibly volatile. A shorter rebalancing period is necessary in order for a pool to maintain a closeness to its pegged index. On an ecosystem such as Ethereum, high transaction costs would be value destroying, slow transaction times afford price divergence, and the mempool encourages front-running.
Solana solves all of these problems. It also doesn’t hurt that Andrew loves Rust.
We hear him sing Rust’s praises on the daily, he won’t shut up about it.
And the way Solana operates is ideal for our vision; it’s an inclusive, positive sum competition atmosphere, where collaboration and support is the norm.
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