Financial Metaverse: Trading Tokens, Derivatives and Other Digital Twins

Synthetic assets surround us in our daily lives. Look around you. The number 18 tokenToken that the cloakroom girl gave you in exchange for your coat? That is a synthetic asset. Its intrinsic valueValue is nil. It is simply a small plastic disc, too large even to insert in the anti-theft system of your supermarket’s trolley. Instead, its valueValue is as a sign. Only imagine the drama that would accompany its loss: a brand new coat! The cloakroom girl owns the other half of the key, an identical tokenToken, with the same number 18 emblazoned in goldGold. She also understands the conventionConvention. The person who offers her the matching tokenToken will be handed the corresponding coat. No further explanation is required. While a small tip might change hands, this is far from compulsory. Such an example might sound trivial. An unintentional exchange cannot be ruled out if the girl has a moment of absence. In general, however, the process leaves little room for confusion. On the other hand, when synthetic assets are meant to represent classes of objects, some of which can be abstract, things can become a little more confusing.