LemmaSwap synthetic tokens are yield bearing ERC20s backed by spot assets and/or long perpetual positions with no leverage. For example, a synthetic ETH (ETH*) can be backed by a long ETH/USD perpetual futures position and/or spot ETH.
There are two ways of minting synthetic tokens:
Deposit a spot asset. LemmaSwap will keep the asset in a collateral pool and mint a corresponding synthetic token.
Deposit USDC. LemmaSwap will use the USDC to go long with no leverage on a user chosen asset’s perpetual market and mint a corresponding synthetic token.