# ZKSynth: A Synthetics Protocol for ZK Ecosystem By [zkSynth](https://paragraph.com/@zksynth) ยท 2023-06-25 --- Synthetic assets are tokens that track the price of another asset, such as stocks, commodities, currencies, or cryptocurrencies. They allow users to gain exposure to various markets without owning the underlying asset or dealing with intermediaries. Synthetic assets have many applications in DeFi, such as trading, hedging, arbitrage, and portfolio management. However, creating and trading synthetic assets on existing platforms has some limitations, such as: * Dependence on centralized oracles or bridges for price feeds and asset transfers * High gas fees and network congestion on Ethereum * Low liquidity and high slippage on decentralized exchanges (DEXs) * Limited leverage and risk management options * Lack of composability and customization for synthetic assets ZKSynth is a synthetics protocol that aims to overcome these challenges by leveraging the power of zero-knowledge proofs (ZKPs) and layer 2 scaling solutions. ZKPs are cryptographic techniques that allow users to prove the validity of a computation without revealing any details about it. Layer 2 scaling solutions are protocols that run on top of a base layer blockchain (such as Ethereum) and enable faster and cheaper transactions. ![](https://storage.googleapis.com/papyrus_images/014ea404b6c0de7fd8f7c49c2fec1e94f128befae1979985e69d8fcf1e27166c.png) ZKSynth is built on ZKP-based layer 2 scaling solutions that offers high throughput, low latency, and low fees. Scroll is compatible with ZKSync, Taiko, Linea, Polygon ZKEVM, and other layer 2 solutions that use ZKPs, leveraging its features and robust security to offer a synthetics platform that is: * Trustless: Users can mint and trade synthetic assets without relying on any third-party oracles or bridges. ZKSynth uses ZKPs to verify the prices and transfers of synthetic assets in a secure and decentralized way. * Scalable: Users can enjoy fast and cheap transactions on ZKSynth thanks to ZKP high-performance layer 2 infrastructure. ZKSynth can handle thousands of transactions per second with near-instant finality and minimal gas costs. * Liquid: Users can access deep and diverse liquidity on ZKSynth's slippage-free DEX. ZKSynth combines synthetic swaps with stable pools to provide the best exchange rates and lowest fees for each swap. * Flexible: Users can trade with up to 250x leverage on any synthetic asset using ZKSynth's perpetual contracts. ZKSynth also offers atomic lending, which allows users to lend and borrow synthetic assets with maximum capital efficiency and base max LTV >95%. * Composable: Users can create and manage their own portfolio of synthetic assets with ZKSynth's synthetic vaults. ZKSynth also allows users to create and join funds, indices, structured products, options, and more with its composable interface. ZKSynth supports over 100 real-world assets natively, including stocks, cryptos, forex, and more. Users can also create their own custom markets with ZKSynth's user-friendly interface. ZKSynth aims to become the ultimate DeFi platform for synthetic assets and derivatives, enabling users to access global markets on-chain with unprecedented speed, security, and efficiency. We are excited to share more details and updates with you soon. In the meantime, you can join our testnet and get a glimpse of the future of synthetics. Stay tuned! --- *Originally published on [zkSynth](https://paragraph.com/@zksynth/zksynth-a-synthetics-protocol-for-zk-ecosystem)*