thorchain/docs

Alternative derivation of synths question

Closed this issue · 2 comments

Looking at the alternative derivation of synths doc: https://docs.thorchain.org/thorchain-finance/synthetic-asset-model

We see the following:
image

Based on these definitions $$U = S$$, Dynamically calculated synth units = Total Supply of Synth Asset.

However that doesn't seem correct.

For
S = Synth Supply
A = Asset Depth
L = Liquidity Units
U = Synth Units

I agree that it looks as though S has been accidentally used instead of U in the last step (and that S should not equal U):
'the ratio of synth units to LP units' should be U/L, not S/L.

The right side of the equation looks correct as described, also equal to the below:

Ratio of {synth Asset-backing} to {pool Asset depth without synth Asset-backing} (given that synth is always half backed by Asset and half backed by RUNE):
(0.5S) / (A - 0.5S)
= S / (2A - S)

This was fixed