Horizon Protocol – Synthetic Assets on the Binance Smart Chain

Horizon Protocol is a DeFi application dedicated to the issuance of on-chain synthetic assets which are based on the prices of real assets such as stocks, commodities or physical assets. Additionally, the protocol provides a native exchange for trading the derivatives that will be issued on Horizon Protocol. The project is a fork of the Ethereum based Synthetix protocol adjusted for the Binance Smart Chain and optimized for lower fees. 

Horizon Protocol

Horizon Protocol IFO on PancakeSwap

PancakeSwap announced that it will be conducting an IFO for $HZN, the Horizon Protocol Token, on April 15, 2021. The price per token is assumed to be 0.25 USD. 

$HZN Token Economics

The total issuance of $HZN tokens is initially 100,000,000. However, the circulating supply of the token will be initially restricted to 10% of the issuance which will be distributed through the IFO on PancakeSwap. The remaining token supply will be allocated towards liquidity mining and ecosystem development. The token supply of $HZN will not be fixed; instead it is projected to inflate at around 70% per year initially. Afterwards the inflation rate will gradually decline. 

The token value accrual of $HZN is fairly similar to $SNX. $HZN token holders will be incentivized to provide their tokens as collaterals for the issuance of derivatives on the protocol. 

Horizon Protocol – Market Potential

If you are wondering whether you should participate in the $HZN IFO it is worth taking a look at the market potential of the $HZN token. Therefore it is useful to first compare the size of the ecosystem which Horizon Protocol wants to serve (BSC) with the size of the ecosystem that Synthetix is already successfully serving (Ethereum). Based on the table below you can observe the Total Value Locked (TVL) on Ethereum and the BSC in billion USD.

EcosystemTotal Value Locked (TVL)
Ethereum54 bn
Binance Smart Chain34 bn 

Note that the TVL in Decentralized Finance on the BSC represents 63% of the TVL locked on Ethereum. In other words the size of the BSC ecosystem is almost two thirds the size of the Ethereum ecosystem. 

Let’s further break this data down and analyze the share of TVL which can be attributed to the Synthetix protocol. In the table below you can observe the TVL in the Synthetix protocol in Ethereum and the equivalent in TVL which Horizon Protocol could capture if it were to fully reach its market potential on the BSC. The assumption is always that the demand for synthetic assets on the BSC will be comparable to the demand for synthetic assets on Ethereum. 

EcosystemTotal Value Locked (TVL)
Synthetix (Ethereum)2.3 bn
Horizon Protocol Current Market Potential (Binance Smart Chain)1.5 bn 

2.3 bn in TVL for Synthetix corresponds currently to a 3 bn market capitalization for $SNX. If Horizon Protocol could exploit the full market potential for the Binance Smart Chain it could reach a market capitalization of 1.9 bn USD accordingly. 

Scenario Analysis

In the following we are going to analyze three different scenarios that could result from the market introduction of Horizon Protocol into the BSC ecosystem. We will further quantify the impact of the scenarios on the market cap and token price of $HZN. 

If we assume that $HZN would create a similar impact on the BSC ecosystem as Synthetix had on the Ethereum ecosystem the $HZN token price valuation could reach 19 USD. However, this scenario is not very realistic in the short term. Instead we believe that the adoption of Horizon Protocol might oscillate between 10%-80% of the market potential in the course of the next half year. In the table below we calculated the corresponding token price targets based on the market adoption of Horizon Protocol. 

Scenario Type% of Market Potential which Horizon Protocol will be able to captureCorresponding Token Price $HZN based on total coin supply
Pessimistic10%1.9 USD
Neutral 50%9.5 USD
Optimistic 80%15.2 USD


As it can be observed in our scenario analysis the token price of $HZN still has significant room for growth based on the PancakeSwap IFO price. The requirement for these projections is that Horizon Protocol is able to successfully capture market share on the BSC for issuing and trading derivative assets. 

Furthermore, the evolution of the protocol and the token price will depend on the further adoption of the BSC ecosystem and its growth in TVL. In this context a bet on $HZN is also a bet on the viability of BSC to continue capturing a significant market share of the smart contract based blockchain ecosystems.