Horizon Protocol
Introduction
Horizon Protocol is a new DeFi platform that facilitates the on-chain trading of synthetic assets that represent the real economy. Horizon Protocol seeks to provide exposure to real-world assets risk/return profiles via smart contracts on the blockchain. Forked from Synthetix, Horizon Protocol will leverage the time-tested derivative liquidity protocol and bring interoperability, scalability and a whole new array of tradable, real-world derivative products to the DeFi ecosystem. Our commitment to the Binance ecosystem and native implementation on Binance Smart Chain (BSC) offer users the speed and dependability that is currently lacking on the Ethereum blockchain.
Horizon Features & Highlights
- Synthetic Asset Creation
- Real-World Asset DeFi Oracles
- Staking & Yield Farming
- Lending & Borrowing
- Advanced Derivatives Trading
- Cross-Chain DeFi
- Community Based Governance
Mission
The main use case of Horizon is to provide easy and secure access to an on-chain synthetic assets and derivatives market, without the need of traditional financial institutions acting as intermediaries. Horizon is able to aggregate fees usually charged by traditional financial institutions and distribute them to market participants via trustless and decentralized Smart Contracts. The Horizon token (HZN) is the native cryptoasset that provides a foundation and serves as collateral for the on-chain synthetic assets and derivatives market. A corresponding real-world asset price oracles system, maintained by Phoenix Oracles in addition to other 3rd party data feeds, provides live exchange rates for real-world assets. As a result, the Horizon Protocol will allow anyone with access to their own on-chain crypto wallet to gain exposure to virtually any asset e.g. BTC to AAPL stock to real estate indices and so forth. By utilizing HZN as collateral, users will experience no slippage or liquidity issues normally faced when using conventional DEXs.
TL;DR
Summarily, Horizon token (HZN) holders will provide the foundation and collateral to the platform at a predetermined ratio (currently 750%) to sustain against extreme price fluctuations and shocks to the market. HZN stakers are incentivized with staking rewards proportional to the amount staked and trading fee rewards from the zAsset DEX. This allows for minting and trading of synthetic assets (zAssets) with no slippage and infinite liquidity up to the Total Value Locked (TVL).
How it works:
The HZN Token
The Horizon token (HZN) drives the economic incentives for participants in the Horizon Protocol. HZN serves as collateral as part of the synthesis of tradable synthetic assets (zAssets), drives the reward system, as well as eventually facilitate a DAO that will govern the overall protocol and future development. By forking from the Synthetix protocol, Horizon Protocol is able to build upon the progress pioneered by others, while focusing on solving challenges related to scalability and affordability.
Staking
HZN holders are incentivized to stake their tokens into a community-based liquidity pool that will collateralize the issuance of all zAssets. HZN stakers are rewarded with HZN staking rewards, which is generated from the token’s inflationary monetary policy, and exchange fees from the Horizon Exchange. Each transaction on the Horizon Exchange incurs up to a 0.3% exchange fee that will be distributed to HZN stakers at a rate proportional to their position size within the liquidity pool.
zAsset Creation and Collateralization Ratio
All zAssets are assigned an exchange rate using price feeds supplied by oracles and are tradable across various blockchains. When HZN is staked, zAssets will be issued at a 750% collateralization ratio to ensure there is sufficient collateral during price fluctuations. As the HZN price fluctuates, the collateralization ratio will also fluctuate, and the staker must restore their collateralization ratio by either burning or creating zAssets to reclaim their HZN.
Horizon Exchange
Horizon Exchange will play a key role in expanding accessibility of various real-world assets as well as providing seamless trading between any combination of assets. Since all zAssets are backed by the same community-based liquidity pool, it makes it easy to trade between zAsset tokens — you are essentially swapping the form that your original USD-based debt is denominated in. This model ensures no slippage on trades and infinite liquidity up to the TVL (Total Value Locked) in the debt pool. Horizon Exchange will also be developing a suite of trading tools that extend what traditional DEXs offer, such as limit orders, stop-losses, trade histories, and fully functional charts for technical analysis. Down the road, Horizon Exchange will look to expand into margin, leverage, and options trading.
HZN-backed Synthetic Assets
Horizon Protocol will not only be offering cross-chain crypto derivatives (long and short positions), but will be focusing on expanding exposure to traditional financial markets, including but not limited to:
Oracles
Horizon Protocol will benefit not only from established data feed oracles such as Chainlink and Band Protocol, but also proprietary data from the Phoenix DeFi Oracle to accommodate assets such as stocks, market indices, and illiquid/alternative assets such as real estate (REITs) and artwork.
The Phoenix DeFi Oracle will utilize the existing Phoenix Chain and bring additional utility to the PHB token by facilitating node operation and the validation of price feeds. The Phoenix DeFi Oracle will focus strictly on the on-chain price feeds of real-world assets mentioned above.
PHB Token Bridge
Horizon Protocol will also enable users to easily bridge their existing BEP-2 PHB tokens into BEP-20 PHB tokens to take advantage of this new staking opportunity. Once the PHB cross-chain token bind is activated, users will be able to bridge their tokens natively via the Binance Chain Wallet.
Interoperability & Binance Smart Chain
The launch of the Horizon Protocol on the Binance Smart Chain (BSC) offers immediate solutions to Ethereum’s current defi scalability issues; namely speed and transaction fees, as well as access to the Binance ecosystem. Furthermore, the use of cross-blockchain platforms such as Cosmos, Tendermint and Polkadot to promote interoperability with Binance Smart Chain, Ethereum Blockchain, and NEO Blockchain, among others, allows Horizon Protocol to offer users cross-chain operability in a seamless experience.
Horizon Protocol Interchain Communication
Horizon Protocol Decentralized Ecosystem
Governance
Horizon Protocol is committed to eventually achieving a fully decentralized governance structure, where HZN stakers have the power to develop and vote upon Horizon Improvement Proposals (ZIPs). Once this decentralized autonomous organization-based (DAO) governance is launched, HZN stakers will be responsible for managing critical parts of the protocol, including but not limited to:
- Collateralization ratio of zAssets
- Staking and Liquidity pool rewards
- Liquidity pool farms
- Exchange (fees, rewards, burns)
- Protocol direction and functional improvements
Conclusion
The Horizon Protocol ushers in a new era of synthetic assets origination and trading, underpinned by the principles of decentralized finance (DeFi). The Horizon Protocol and Phoenix Oracle Network comprise the two-part foundation working in tandem to facilitate an on-chain spot and derivatives market, and allowing anyone to gain exposure to a variety of real-world assets, crypto assets, and unlimited trading between the two. All on the same platform with no slippage or liquidity issues. Horizon Protocol addresses key challenges faced by the congestion of the Ethereum blockchain by leveraging the speed of the Binance Smart Chain and ecosystem, providing scalability, low trading fees, and fast execution.
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