The cryptocurrency field is gradually integrating with the traditional financial ecosystem aiming to unlock liquidity, reduce costs and increase profits for investors. Despite falling behind in recent years, investment banks are finally embracing cryptocurrencies, allowing clients to unlock the potential of the digital asset markets using blockchains. Crypto firms in a similar fashion are entering the investment banking scene with an aim to disrupt their traditional counterparts.
Launched in 2018, Synthesis Bank (also Synthesis), a sophisticated smart investment bank, aims to revolutionize investment banking for its client via the integration of audited smart contracts. Built on Ethereum, the token-based service allows users to invest in digital assets and other alternative financial products on blockchain systems.
The service also includes its native ERC-20 token, STB, which represents a virtual share of Synthesis Bank that gives holders several benefits including monthly dividends based on the performance of the company.
Synthesis is building a unique opportunity for crypto investors that “seeks to capitalize on the growth and market adoption of crypto currencies,” its website reads. In its efforts to boost investment in digital assets, Synthesis offers institutional and retail clients an easy-to-use and fast investment channel as well as a profitable set of cryptos to optimize their returns.
“The goal of this project is to eliminate the setup and operational costs imposed by middlemen in traditional funds, while maximizing transparency and liquidity for investors,” Synthesis website reads.
As the world’s first crypto-tokenized investment bank, Synthesis uses its fund protocol to build innovative solutions for its clients. The fund protocol is automated through the smart contract and manages the fuds through “a number of positions and strategies, market making, cross exchange market making, algo/HFT, liquidity mining, and arbitrage.”
The bank’s success however lies in its compliance and transparency as much as the focus on technology. The smart contract on Ethereum is fully audited by CertiK, a top blockchain audit firm, and a strict criteria guiding the portfolio allocation is also followed. Notwithstanding, the firm also uses AI-trained quants to maintain the highest level of accuracy, minimize human interactions and maximize the risk-adjusted returns on their portfolios.
As alluded to, Synthesis introduced its token, STB, which represents a virtual share of the company. The token gives its holders two primary benefits to investors – net asset value appreciation when the price rises and the monthly dividend returns aligned with the performance of the investment bank. Half of the ‘realized’ profits each month will be distributed to investors, 30% will be re-invested while the rest will be used to cover administrative costs.
Finally, Synthesis also developed a mobile app – available on both iOS and Android – to allow users to track their portfolios, check transactions and quickly check on the firms AUM growth, as well as receiving live updates from the firm.