The problem DAOlaal solves

The global stock market is riddled with geographic regulations, high fees, and complicated currencies. In today's world, millions want to have price exposure to international assets, may it be buying GME from India or ZOMATO from Japan.

DAOlaal solves all the above by creating synthetic assets of stocks and indexes, softly pegged to real-world prices. Aiming to create an open market where global equities and indexes go hand-in-hand with traditional cryptocurrencies for trading, yield farming, or liquidity mining.

How we do this

• New synthetic token (ex - xReliance) can be minted based on real-world asset (Reliance) whose price we get via Chainlink Oracle. The user has to deposit enough collateral for minting for protecting the contract against price fluctuation. If the real world price changes(increases), the required collateral amount also changes that the user has to provide to avoid liquidation.
• The user can burn the token at any time, to get back his collateral
• The synthetic tokens are independent ERC20 tokens, which can be freely traded
• Users providing collateral and liquidity would earn flat interest from the trading fees collected.

How are the prices soft pegged to real-world prices?

• The prices are expected to converge due to arbitrage and liquidation pressure, there's no forceful fixation to the real world.
• If token price is higher than the real-world price, then a user can mint a token and short it. Once the price comes down due to selling pressure, he can re-purchase the token at a lower price. He'll then burn it to get back his collateral and make the shorting profit
• If token price is lower than the real-world price, then a user can buy the token and hold it till the price improves. He'll sell it when the prices are converged and making the long profit. Also as the real world prices are increasing, due to lack of collateral, positions would be liquidated for adding collateral which would add buying pressure and increase prices.

Challenges we ran into

Our team was new to Web 3.0 and had a steep learning curve in tech stack and DeFi ideas.
We struggled a bit with the overall idea of the project and how to do collateral-backed minting as we couldn't find a standard contract for this.
Also getting prices was a challenge, Chainlink simplified some pairs for us but for others, we had to write custom API
Also, we couldn't make a liquidity provider or swap work in test-net, so that remains to be tested in production.