> For the complete documentation index, see [llms.txt](https://s0x.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://s0x.gitbook.io/docs/primary-issuance/comparison-with-synthetics.md). # Comparison with synthetics $0X provides a truly scalable solution Currently, the majority of attempts to represent stocks on the blockchain have been made using synthetic approaches. This involves creating a token and attaching it to a price feed. Liquidity is then provided to facilitate trading based on that price feed, while convincing the community that this new token's value can be maintained through the liquidity provided. However, this model requires a substantial amount of liquidity, and efficient management to wait for the markets to deviate from the 1-to-1 alignment, at which point an intervention is made to adjust the alignment back to its target. This way, the synthetic approach becomes a liquidity game, because users with significant liquidity can easily cause significant deviations in the market. In such cases, the responsibility falls on the liquidity providers to protect the system, even if it means incurring losses. Moreover, one of the advantages of bringing these RWAs on-chain is the ability to interact with other protocols so that these assets may be used across the ecosystem. As these synthetic assets become more integrated into the ecosystem, the potential damage caused by a depegging event becomes even more severe. $0X offers an alternative solution that doesn't require users to provide inefficient liquidity; instead, it relies on users trusting the model. $0X represents assets by tapping into the underlying market to directly mirror RWAs on-chain, maintaining a 1-to-1 relationship with their off-chain counterparts. By interacting with the off-chain market, $0X gains access to the liquidity of some of the world's largest markets. When markets deviate from the desired alignment, $0X can use direct arbitrage with the off-chain market to realign them. This mechanism is robust enough to encourage traders to front-run the arbitrage, thereby helping to maintain market alignment further.
In this model, $0X holds a highly unique position with regard to arbitrage. Arbitrage trades are in high demand, and traders invest significant effort in creating complex models to execute them. $0X has the ability to control access to these trades, turning it into a profit-making mechanism rather than a losing one. This approach fosters healthier markets and provides greater financial stability for $0X, ultimately benefiting its users. In the future, $0X plans to open up this arbitrage line to its liquidity and market-making partners to further expand its markets rapidly.