What Sets Synonym Apart?

Synonym Finance
6 min readJan 25, 2024

Many people who have heard of Synonym know it as a DeFi app where you can lend and borrow. However, there’s no shortage of money markets in DeFi. So, what sets us apart?

Zooming out, we see Synonym as more than a money market — it lays the foundation for a new and easier way to interact with DeFi. Our ultimate goal is to merge the best tech in DeFi with truly efficient cross-chain markets to create an easy and desirable UX.

We aim to achieve this by:

  • Unifying liquidity across a growing number of blockchains
  • Building on top of the the most robust cross-chain technology
  • Collaborating with top DeFi projects to create new and interesting features

Overall, Synonym sets itself apart from the competition by solving critical fragmentation issues currently affecting DeFi, as well as with its unmatched community of partners and users.

The Tech

On the technology side, Synonym is solving two fragmentation problems: liquidity fragmentation and technology fragmentation

Liquidity Fragmentation

Even casual DeFi participants will know that liquidity fragmentation is a major hurdle to attracting new and especially large inflows of assets. We’re in the early stages of an exponential increase in the number of available blockchains and scaling solutions, which has become increasingly evident by the ongoing proliferation of layer 2 chains and even the early development of layer 3s.

However, the amount of liquidity in the space isn’t growing fast enough to sufficiently fund all of these new chains. As a result, assets are being spread thinly between them; in other words, liquidity fragmentation is getting worse.

Additionally, many projects that are live on multiple chains don’t directly enable the flow of liquidity between them. If an app is live on 10 blockchains and each one has a separate liquidity pool, it’s only contributing to DeFi’s liquidity fragmentation problem.

Synonym is solving this problem by treating assets on different chains as one unified money market. For example, users will be able to deposit ETH on Ethereum mainnet and borrow USDC from Arbitrum. Eventually, we plan on implementing cross-chain repayments as well.

Synonym will initially unify liquidity on Mainnet, Arbitrum, and Optimism, but the potential for expansion is enormous. Over time, we plan on scaling to all the available blockchains on Wormhole, which is currently at 29 chains and growing fast. The end result will be a universal money market with a UX that abstracts away the need to know which chain you’re using.

Technology Fragmentation

The fragmentation of tech in the DeFi space doesn’t get the same amount of attention as liquidity fragmentation, but it’s becoming increasingly relevant.

Blockchain technology is in an era of exponential growth in terms of scaling and functionality. In our opinion, some of the greatest advancements in the entire field have been achieved in cross-chain communication. However, if that technology isn’t being used to its full potential, users will never see its benefits.

So far, bridging is the only “sector” of DeFi that’s embraced cross-chain communication. Other popular application types, such as DEXs, money markets, and CDPs have remained focused on making their protocols more efficient, but rarely on a cross-chain level.

This is especially true for money markets, as it takes a highly robust system to ensure that:

  • Asset prices and interest rates are always accurate for users on all connected chains
  • Transactions are ordered correctly — even a small error could result in users being erroneously liquidated

Synonym is not only building an efficient and decentralized money market, we’re ushering in the next chapter of DeFi by enabling cross-chain collateralization. To accomplish this, we’re combining forces with some of the top technology available today, which many other projects haven’t yet adopted.

The Community

No single project can revolutionize something as big as the current financial system on its own. It takes a team effort and strong community, and Synonym has both. We’re excited to have a long list of powerful and synergistic partnerships, as well as our community of knowledgeable and enthusiastic DeFi power users.

Our Partners

Synonym will be a combination of the best providers of many different technologies available in web3, including Arbitrum, Wormhole, Pyth, Circle, and the New Order DAO ecosystem.

Wormhole

As we mentioned earlier, Wormhole’s cross-chain messaging technology currently enables asset transfers between 29 different blockchains. This is the core technology that allows Synonym to function as a cross-chain money market. As Synonym expands, we also plan on using Wormhole’s mint and burn functionality to make cross-chain asset flows even more efficient. The Wormhole Foundation is also directly fueling Synonym’s growth with their recent $100k grant.

Pyth

In order to create a true cross chain lending experience, Synonym needs to unify all available assets on all blockchains with perfectly in-sync pricing. Pyth provides over 400 price feeds for tokens, stocks, forex, commodities, and more across nearly 50 blockchains spanning layer 1, layer 2, and layer 3 ecosystems.

Circle

With Circle’s cross-chain transfer protocol (CCTP), native USDC can be seamlessly transferred between different blockchains. This will make USDC the most flexible asset to use for activities such as posting cross-chain collateral or repaying a loan taken out in another asset on another chain. For example, a user who took out a loan in ETH on Arbitrum could repay it with native USDC from Optimism. As a result, USDC has the potential to become the de-facto settlement asset on Synonym.

New Order Ecosystem

Our merger with New Order DAO puts us in a great position to collaborate with some of the best builders in DeFi. We’re excited to grow alongside projects such as Redacted Finance, Y2K Finance, Smilee Finance, and Sector Finance and explore potential integrations.

These partnerships not only build excellent tech, but also are aware of the need for community, and we’re all aligned in our goal to bring permissionless DeFi to as many people as possible using superior technology to today’s financial industry.

Arbitrum

Many of the projects within the New Order ecosystem have close ties with Arbitrum — and for good reason. Arbitrum DeFi has continuously been a thriving environment for collaboration, which attracts the most active and professional users in DeFi.

In fact, the strength and collaborative nature of Arbitrum’s DeFi community is why we chose it as our central hub. Every transaction that takes place on Synonym goes through Arbitrum via a Wormhole message secured by their Guardian network. In other words, Arbitrum is at the core of Synonym and serves as its record-keeping system.

Our Users

We also understand the need for a strong community of users, and we were ecstatic to see over 1,000 individual users make over 100,000 transactions on our testnet app. While many DeFi apps are clunky and unreliable, we place a huge emphasis on our UX. Without a satisfying UX, the technology can be the best in the world, but it’s much harder to attract, let alone keep users.

Looking ahead, we want to keep building our community by expanding onto the chains with the strongest communities as well as listing assets that people want to lend and borrow. Eventually, we want Synonym to be the place where everyone can lend and borrow their favorite token, NFT, RWA, and beyond.

The Future

Our mainnet launch is less than a week away! While we’re thrilled to reach this milestone, it’s the beginning of a massive undertaking to truly revolutionize the way people interact with DeFi. We have lots in store for the future, from expanding our list of compatible chains and assets to strengthening the deepest part of our infrastructure with atomicity and automatic relayers. Stay tuned!

And for all news, alpha, and more, make sure to follow us on X as well as join our community on Discord.

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