Case Study
REAX
Building a Scalable Synthetic Asset Protocol
REAX
reax.pro
SolidityMantleReactTypeScriptDIA Oracle+5 more
Project Overview
Transforming vision into reality
About This Project
A comprehensive case study detailing ChainScore Labs' development of REAX, a revolutionary trustless synthetic asset issuance and trading protocol built on Mantle. We engineered a sophisticated platform that enables users to mint and trade synthetic representations of real-world assets including cryptocurrencies, stocks, forex, and commodities with zero slippage. The protocol features composable pools, atomic swaps, leveraged trading up to 125x, and oracle integration with DIA, all while maintaining robust security measures and community governance.
Client
REAX
reax.proTimeline
Start
July 2023
Completed
June 2024
Duration
11 months
INTRODUCTION
Revolutionizing Synthetic Assets
Traditional DeFi platforms have struggled with fundamental limitations: high slippage on large trades, impermanent loss for liquidity providers, and limited access to global financial markets. REAX was conceived to address these challenges by creating a novel synthetic asset protocol that enables zero-slippage trading, eliminates impermanent loss, and provides access to a wide range of real-world assets through on-chain synthetics. This case study details how ChainScore Labs partnered with the Mantle Network to build this ambitious platform from concept to production. By leveraging innovative debt pool mechanisms and atomic swap functionality, we engineered a system that maintains the trustless nature of DeFi while expanding its capabilities into traditionally inaccessible markets like stocks, forex, and cross-chain cryptocurrencies without relying on bridges or custodial services.
PROTOCOL-ARCHITECTURE
Core Protocol Architecture
The REAX protocol is built on a sophisticated multi-layered architecture designed to provide maximum flexibility, security, and capital efficiency. At its core, REAX uses a shared debt pool model where users mint synthetic assets backed by collateral, with layers of functionality built on top to enable trading, margin, and advanced financial products.
- Isolated Market Design: Implemented distinct market pools (Crypto, Stock, Forex) that operate independently with their own collateral types, risk parameters, and synthetic assets to minimize contagion risk across different asset classes.
- Shared Debt Mechanism: Engineered a system where users sharing a pool also share the debt of that pool, creating aligned incentives while enabling capital-efficient minting of diverse synthetic assets.
- Multi-Collateral Support: Designed flexible collateral mechanisms supporting various assets (USDC, ETH, TLOS) with dynamic C-Ratio requirements tailored to the risk profile of each market pool.
- Oracle Integration: Integrated multiple decentralized oracle networks including DIA and Pyth to ensure reliable, manipulation-resistant price data across all supported synthetic assets.
3+
Market Pools
Crypto, Stocks, Forex
Multiple
Collateral Types
Per market isolation
2+
Oracle Networks
Redundant price feeds
REAX Isolated Market Architecture Diagram
SYNTHETIC-ASSETS
Synthetic Asset Creation
The core innovation of REAX is its ability to create on-chain synthetic assets that track the value of real-world counterparts without requiring direct ownership. This unlocks global markets for DeFi participants while maintaining the transparency and composability of blockchain technology.
- Collateralized Debt Position: Implemented a system where users deposit collateral to mint synthetic assets, creating a debt position that must maintain required collateralization ratios to avoid liquidation.
- Dynamic Debt Adjustment: Designed a novel mechanism where debt is variable and adjusts based on the user's proportional share of the pool's total debt, aligning with the protocol's risk management strategy.
- Multi-Asset Support: Created support for hundreds of synthetic assets spanning cryptocurrencies (BTC, ETH, XRP), equities (AAPL, GOOGL, MSFT), currencies (EUR, JPY, GBP), and commodities, all tradable on-chain.
- Asset Expansion Framework: Designed a governance process for adding new synthetic assets that evaluates oracle availability, market demand, and risk parameters to ensure sustainable growth of available markets.
500+
Synthetic Assets
Available for minting
4+
Asset Categories
Crypto, Stocks, Forex, Commodities
≥120%
Collateralization Ratio
Varies by market risk
Collateral Deposit Interface
ZERO-SLIPPAGE-TRADING
Zero-Slippage Trading Engine
Revolutionizing DeFi Exchanges
REAX's trading engine represents a significant advancement in DeFi exchange technology. By implementing an atomic swap mechanism for synthetic assets, we've eliminated the traditional AMM liquidity pool model that causes slippage and impermanent loss, creating a superior trading experience with instantaneous execution at oracle prices.
- Atomic Swaps: Engineered a novel swap mechanism that directly exchanges one synthetic asset for another at the exact oracle price, regardless of trade size, eliminating slippage entirely.
- Oracle-Based Pricing: Implemented a reliable pricing mechanism that leverages decentralized oracle networks to provide accurate, manipulation-resistant reference prices for all synthetic asset exchanges.
- Capital Efficiency: Designed the system to require no dedicated liquidity pools, allowing all collateral to work efficiently while supporting unlimited trading volume between synthetic assets.
- Trading Interface: Created an intuitive trading interface that simplifies the complex underlying mechanisms, allowing users to execute zero-slippage trades with just a few clicks.
- Price Impact Control: Implemented dynamic swap fees that adjust based on market conditions to mitigate excessive volatility while maintaining zero-slippage execution.
REAX Trading Interface
0%
Slippage
For all synthetic asset trades
1000+
Trading Pairs
All synthetics are cross-tradable
None
Trade Size Limit
No size-based slippage
LEVERAGE-TRADING
Advanced Trading Features
REAX goes beyond basic asset creation and swaps by incorporating advanced trading features typically found in sophisticated TradFi platforms. These features enable traders to implement complex strategies and maximize capital efficiency within a fully decentralized environment.
- Leverage Trading: Implemented high-efficiency leverage trading up to 125x, allowing users to amplify exposure to price movements while managing risk through advanced liquidation mechanisms.
- Perpetual Contracts: Designed a funding rate mechanism for perpetual futures that balances long and short positions, enabling continuous leveraged exposure without expiration dates.
- Options Trading: Developed on-chain call and put binary options, giving traders tools for hedging, speculation, and advanced portfolio management within the synthetic asset ecosystem.
- Structured Products: Created frameworks for indices, leveraged tokens, and other structured products that provide specialized exposure to market segments or investment strategies.
125x
Maximum Leverage
For perpetual contracts
Call & Put
Options Types
Binary options
Multiple
Structured Products
Indices, leveraged tokens, etc.
REAX Ecosystem of Financial Products
ORACLE-INTEGRATION
Decentralized Oracle Integration
REAX's reliability and security depend heavily on accurate price data. We integrated multiple oracle networks to ensure robust, manipulation-resistant price feeds for all supported synthetic assets, with a particular focus on our strategic partnership with DIA for expanded asset coverage.
- Multi-Oracle Strategy: Implemented a system that aggregates price data from multiple oracle networks, applying statistical methods to detect and mitigate outliers and potential manipulation attempts.
- DIA Partnership: Established a strategic integration with DIA's advanced oracle technology to deliver precise, real-time pricing data for decentralized synthetic assets, significantly expanding the range of assets available on REAX.
- Price Feed Reliability: Engineered fallback mechanisms and heartbeat checks to ensure continuous price data availability, with graceful degradation protocols during temporary oracle outages.
- Customized Update Frequencies: Implemented asset-specific update frequency requirements based on volatility profiles, ensuring optimal balance between data freshness and gas efficiency.
4+
Oracle Networks
Including DIA and Pyth
Asset-specific
Price Update Frequency
Based on volatility profile
Diversified
Data Sources
CEX, DEX, and aggregators
REAX Partnership with DIA Oracle
RISK-MANAGEMENT
Risk Management Framework
Ensuring Protocol Stability
A robust risk management framework is essential for a synthetic asset protocol handling significant value. REAX incorporates multi-layered risk controls to protect users and ensure system stability even during extreme market conditions.
- Dynamic Collateralization Ratios: Implemented market-specific and asset-specific collateralization requirements that adjust based on historical volatility, liquidity, and other risk factors.
- Liquidation Mechanism: Designed an efficient liquidation process that incentivizes external liquidators to maintain system solvency by closing undercollateralized positions before they can impact the wider protocol.
- Global Debt Ceiling: Established configurable maximum debt limits for each asset and market pool to prevent excessive concentration risk and ensure controlled, sustainable growth.
- Emergency Circuit Breakers: Implemented circuit breakers that can temporarily pause specific protocol functions during extreme market volatility or detected oracle irregularities.
- Health Factor Monitoring: Created comprehensive monitoring tools for users to track position health, providing clear notifications as positions approach liquidation thresholds.
Pool-specific
Liquidation Threshold
Typically 110-115%
10+
Risk Parameters
Per market pool
Multiple
Circuit Breaker Types
Oracle, volatility, volume based
USER-EXPERIENCE
Intuitive User Experience
REAX addresses one of the biggest barriers to DeFi adoption: user experience. We designed an intuitive interface that masks underlying complexity while providing powerful tools for both beginners and advanced users.
- Streamlined Onboarding: Created a guided onboarding process with clear explanations of key concepts, helping new users navigate the platform successfully from wallet connection to first trade.
- Interactive Dashboard: Designed comprehensive dashboards that provide clear visibility into positions, health metrics, and market conditions, enabling informed decision-making.
- Mobile Optimization: Engineered a responsive interface that works seamlessly across devices, ensuring users can monitor and manage positions on the go.
- Educational Resources: Integrated contextual tutorials, tooltips, and strategy guides directly into the interface to help users understand the platform's capabilities and optimize their approach.
3
Onboarding Steps
From wallet to trading
Multiple
Supported Wallets
Including browser and mobile options
10+
Educational Modules
Integrated into the platform
REAX Main Dashboard Interface
GOVERNANCE-TOKENOMICS
Community Governance & Tokenomics
REAX is designed as a community-owned protocol with governance mechanisms that enable stakeholders to guide its evolution. The tokenomics model aligns incentives for long-term growth while rewarding active participation in the ecosystem.
- Decentralized Governance: Implemented a governance system where token holders can propose and vote on protocol upgrades, parameter adjustments, and treasury allocation to ensure community-driven development.
- Revenue Sharing: Designed a mechanism where protocol-generated fees are distributed to stakeholders, creating sustainable value capture for long-term participants.
- Balanced Supply Distribution: Created a token distribution model that balances initial team and investor allocations with community mining rewards, ensuring broad and fair distribution over time.
- Incentive Alignment: Engineered staking and lockup mechanisms that encourage long-term commitment to the protocol's success while mitigating potential market volatility.
Token-based DAO
Governance Model
With delegation support
Stakeholder Aligned
Fee Distribution
Protocol revenue sharing
Multiple
Proposal Types
Technical, financial, governance
DEVELOPMENT-APPROACH
Development Process & Methodology
- Iterative Development: Employed an agile methodology with two-week sprints to deliver incremental protocol improvements while maintaining overall architectural integrity.
- Comprehensive Testing Suite: Created extensive unit, integration, and stress tests covering all protocol functions and edge cases, including simulated market crashes and oracle failures.
- Formal Verification: Applied formal verification techniques to critical contract components, mathematically proving the correctness of key functions like liquidation logic.
- Security-First Design: Followed defense-in-depth principles with multiple security layers, parameter bounds, access controls, and emergency shutdown mechanisms.
- Independent Audits: Engaged multiple specialized security firms to conduct thorough code audits and verified remediation of all identified issues.
- Public Testnet Phase: Conducted extended public testnet with bug bounties, iterating based on community feedback and real-world usage patterns.
- Incremental Deployment: Launched core functionality first with conservative parameters, gradually enabling additional features and expanding supported assets as the system proved stable.
- Continuous Monitoring: Implemented comprehensive monitoring and alerting systems to rapidly detect and respond to any unexpected protocol behavior or market conditions.
Metrics
Market Impact and Future Vision
REAX represents a significant advancement in DeFi synthetic asset technology, combining the best aspects of traditional finance with blockchain innovation. The platform enables global, permissionless access to a diverse range of assets that were previously unavailable in DeFi, all with superior trading characteristics like zero slippage and high capital efficiency. As synthetic assets continue to gain adoption, REAX is positioned to play a key role in the evolution of decentralized finance by bridging traditional markets with blockchain technology. The roadmap includes expansion to additional asset classes, cross-chain deployment, enhanced governance mechanisms, and deeper integration with the broader DeFi ecosystem. By bringing the global financial system on-chain in a trustless manner, REAX is helping fulfill the promise of truly open, efficient, and accessible financial markets for everyone.
1M+
Total Value Locked
Target for first quarter
$10M+
Trading Volume
Monthly target
Ongoing
Asset Expansion
New assets added regularly
Industry-Leading
Market Innovation
Zero-slippage synthetic trading
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