How spherical synthesis works

Ready Player One provides users with a quick and easy digital currency marketplace where lenders can earn interest on their digital assets by supplying supported (or whitelisted) assets into the protocol. Assets deposited by lenders are transferred into smart contracts that aggregate the total liquidity of each asset into pooled funds for borrowers to borrow. Loans are not matched individually between lenders and borrowers, but drawn from pooled funds. Moneylenders earn their income from the interest paid by borrowers, which is distributed in proportion to the liquidity they provide. Once lenders provide assets into the protocol, these assets will be used as collateral, allowing lenders to also borrow any assets up to a certain limit, as shown in the figure below. This means that any borrower must first provide assets as collateral to the protocol before taking out any loans.

The key concepts of the Ready Player One protocol are outlined below:

deposit assets

Suppose Alice deposits one of the supported (whitelisted) assets, such as ETH (Ethereum), into the protocol. Once funds are deposited, the deposited ETH will be added to the pooled funds, which is known as total liquidity . This total liquidity is calculated as follows：

Total Liquidity = Total Available Liquidity + Borrowing

Total Total Available Liquidity refers to the liquidity of the asset that is available for borrowing or lending cash by borrowers. Total Borrowing Assets is the sum of all borrowers' total borrowings and accumulated borrowing interest. The total loan amount is calculated as follows:

Total loan amount = loan amount + accumulated loan interest

This means that aggregate liquidity will continue to grow as aggregated borrowing interest grows over time. Alice will receive sToken (such as ETHETH), which represents the total liquidity of her ETH shares in ETH deposits. sToken is a tokenized representation of a user's loan position and is an interest-bearing ERC20 token, which means that sToken can claim more of the underlying asset .

sToken each user receives is calculated as follows :

sTokens = deposit amount * total number of sTokens / total liquidity

The total number of sTokens is based on the first user to deposit this asset. For example, if Bob is the first user to deposit 1,000ETH, the total ETH will start with 1,000ETH. If Alice adds 100ETH when the total liquidity is 1,100ETH, Alice gets 90.90ETH (100*1,000/1,100 ).