> For the complete documentation index, see [llms.txt](https://faqs.thorwallet.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://faqs.thorwallet.org/features/synthetics.md).

# Synthetics

Synthetics are a new functionality of the THORChain network. They are derivatives of other coins and tokens (e.g., BTC or DOGE) and are derived from liquidity pools with no risk of impermanent loss. Another unique feature of Synthetics is that they are always backed by 50% of the original asset and 50% RUNE. Every Synthetic is redeemable at a 1:1 ratio with its underlying native version, and you can mint any Synthetic with any asset, such as minting a DOGE Synthetic with native BTC. For more technical details, you can find them here:

**Resources on Synthetics:**

* [THORChain Synthetic Asset Model](https://docs.thorchain.org/thorchain-finance/synthetic-asset-model)
* [Understanding Synthetic Assets](https://crypto-university.medium.com/synthetic-assets-79df3e3af113)

### Benefits Of Synthetics

1\. Because Synthetics are based on [THORChain](https://www.thorchain.com/), they take over the network fees of [THORChain](https://www.thorchain.com/) which can save you a lot of funds (each transaction costs only 0.02 in $RUNE).\
2\. [THORChain](https://www.thorchain.com/) transactions only take ca. 5 seconds to complete. (there could be a transaction delay)\
3\. Because you mint a Synthetic with only one asset, you are only exposed to the price fluctuation of one asset, thus avoiding the [Impermanent Loss](broken://pages/oy57o3yaprftG7UH07yb).

{% hint style="info" %}
**Important note: Synthetics do NOT earn any APY/APR!**
{% endhint %}


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