# Introduction

The oracle-based system uses a peer-to-pool trading model that eliminates the need for counter-parties, enabling a capital-efficient and scalable trading experience. This model ensures traders benefit from low fees, deep liquidity, and zero slippage when engaging with synthetic assets. 

The oracle-based system is powered by [Horizon Protocol](https://app.horizonprotocol.com/), a decentralized derivatives trading and liquidity protocol designed to provide seamless access to the real-world economy through synthetic assets, such as fiat currencies (USD, EUR, JPY) and commodities (gold, silver).

#### Key Features

* **Diverse Asset Offering:** Trade synthetic derivatives representing fiat currencies, commodities, and more.
* **Low fee & zero spread:** The peer-to-pool model ensures traders benefit from lowest fees, deep liquidity, and zero slippage when engaging with synthetic assets. 

**How Oracle-based System Works**\
The Oracle-based system design revolves around its [synthetic assets](https://academy.horizonprotocol.com/horizon-protocol/introduction/synthetic-assets-zassets#zassets) (zAssets), created and backed by its decentralized ecosystem. The system ensures efficient trading through a robust collateralization mechanism and a peer-to-pool model.

At the foundation of the system is zUSD, a synthetic stablecoin minted using HZN as collateral. zUSD acts as the primary medium of exchange within the protocol, enabling traders to open positions on a variety of synthetic assets (zAssets). This framework allows users to gain exposure to real-world assets and markets without needing direct ownership of the underlying assets.

Unlike traditional perpetual futures trading, which requires two counterparties (a long and a short), the oracle-based system operates a peer-to-pool model. In this model:

* The liquidity pool, backed by HZN collateral, serves as the counterparty for all trades.
* Traders interact directly with the protocol, eliminating the need for matching orders between individual users.
* This design provides deep liquidity and zero slippage, ensuring seamless execution even for large trades.

The ecosystem consists of three primary applications:

* **Futures Exchange:** A perpetual futures exchange offering leveraged trading with deep liquidity.
* **Spot Exchange:** A spot trading platform for synthetic assets with low fees and instant execution.
* [**Staking**](https://app.horizonprotocol.com/stake/home)**:** A liquidity staking platform that rewards users for supporting the protocol’s liquidity.

**Benefits of the Oracle-based system**

* **Low Fees & Deep Liquidity:** The peer-to-pool model ensures cost-efficient trading with minimal slippage.
* **Scalability & Integration:** As a native BNB Chain protocol, Horizon Protocol benefits from seamless scaling and connectivity with other dApps.
* **Innovative Derivatives:** Access to a wide array of synthetic assets representing real-world markets, expanding trading opportunities for DeFi users.

**Summary**\
Oracle-based system transforms decentralized derivatives trading by offering a seamless, scalable, and efficient platform for accessing real-world assets. With its peer-to-pool model, comprehensive application suite, and integration with BNB Chain, it combines the advantages of decentralized trading with the innovation of synthetic derivatives.


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