FAQ

1. What are Selenized Assets?

The aim of Selenized Assets is to mimic the price trends of real-world exchange-traded underlying assets and give investors access to not only home markets but also foreign markets as well. While sGOLD tries to closely represent the movements of GOLD, users are not afforded any rights of the underlying asset and tracking errors may arise due to the imbalances in trading volume in the underlying markets and the Terraport markets.

2. How are Selenized Assets actually traded?

Selenized Assets are traded through interacting with liquidity pools on Terraport. For more information about the mechanism of Terraport, please see here.

3. Do I have to go through the KYC process?

Selenium aims to be decentralized in all aspects including whitelisting, governance, minting, and trading. As a result, as long as you have USTC balance, you are able to perform all functions available on both the Selenium protocol as well as Selenium protocol-owned Terraport pools without any need to go through a KYC process.

4. How are dividends handled?

Given that Selenized assets do not confer any rights of the underlying asset, Selenized assets do not give dividends.

5. What are the trading commissions composed of?

There is a fixed fee called the LP commission is 0.30% which serves as a reward for liquidity providers for Selenium-related pools on Terraport. More detailed information can be found here.

6. What does it mean to mint a Selenized Asset?

All Selenized Assets that are purchased or sold on Selenium were, at one point, minted. Minting is the process of providing collateral to issue a “synthetic” Selenized Assets.

Price oracles play an important role in the minting process and are used for two key functions: First, they help determine the amount of collateral required for minting a Selenized Asset. Second, they help determine whether sufficient collateral is backing existing Selenized Assets.

For example, assume that a minter provided $150 worth of collateral to issue a Selenized Assets worth $90 and that the minimum collateral ratio (MCR) is 150%. If the asset’s value increases to $101, then the collateral ratio would be 149% ($101/$150) and would fall below the MCR.

When this happens, the Selenium protocol will seize a portion of the collateral and initiate an auction for anyone willing to sell the Selenized Asset in exchange. To incentivize this liquidation, the Selenium protocol allows anyone to purchase this seized collateral at a discount until the collateral ratio reaches the MCR again. In the example, using the collateral supplied, users will be able to send Selenized Assets tokens in exchange for discounted collateral until the collateral ratio reaches 150% again. If, for instance, the asset price increases again, then the process repeats itself until the collateral ratio reaches 150%.