Glossary
Synthetic Asset
An on-chain token whose price tracks an underlying asset (gold, a stock, another crypto) via collateral and an oracle — without holding the underlying.
A synthetic asset is a derivative that exposes the holder to the price of some underlying without requiring direct ownership of it. Mirror Protocol (sUSD, sTSLA), Synthetix (sBTC, sETH), and many others mint synthetics against over-collateralized positions in a native token, with an oracle feeding in the underlying's price.
Synthetics let crypto users get exposure to off-chain assets without custody, but the system is only as safe as its oracles and its collateral peg — and historically several of these systems have broken under stress.