![Crypto Terms Glossary: What is Synthetic Asset? Crypto Terms Glossary: What is Synthetic Asset?](/img/184/1388/what-is-synthetic-asset-sm.webp)
Synthetic assets are digital cryptographic assets that represent commodities like gold and silver, stablecoins, fiat currencies, and similar financial instruments. In short, synthetic assets are tokenized versions of traditional asset types that are often less readily available to users who participate in the traditional financial sector. Synthetic assets can often represent derivatives contracts from underlying assets such as stocks, bonds, commodities, currencies, indices, and interest rates. This capability gives investors the opportunity to invest in traditional asset classes through unique decentralized finance (DeFi) instruments and their underlying protocols, thus increasing ease of use and lowering the barrier to entry for investing in the assets in question.