How Do Oracles Enable the Creation of Synthetic Assets?

Oracles enable synthetic assets by providing the real-time, verifiable price feed of the underlying asset that the synthetic token is designed to track. A synthetic asset is a tokenized derivative that mirrors the value of a non-crypto asset, like a stock or commodity.

The oracle is essential for the minting, redemption, and collateral management of the synthetic asset, ensuring its on-chain value accurately reflects the off-chain value.