Value Layer
Introduction
The Synchronicity Value Layer (SVL) is the economic layer of the sREAL Engine. The SVL introduces the ability to both express and compose arbitrary forms of value. This composability, in combination with the SyncVM, enables cross and unified margin at the blockchain level. The SVL will finally enable leviathan-free financial activity to achieve a similar level of capital efficiency to its centralized counterpart.
The SVL is composed of two modules, a Token Module and a Collateral Requirement Module. The Token Module allows for the creation of any form of value and makes all forms of value composable. The Collateral Requirement Module defines a structure to holistically evaluate any forms of value stored in accounts and enforce complex sets of collateral requirements that must remain true to prevent a liquidation from occurring.
Token Module
The Token Module has two main responsibilities. The first is to empower developers with the flexibility to define value in any way. The second is to define a universal interface that allows for functions that use the interface to compose with all forms of value.
With respect to defining value, the Token Module provides templates for fungible, semi-fungible, and non-fungible assets. Should developers wish to define value from scratch due to needs for higher customizability, they have ability to do so in separate modules (including the EVM, SVM and MoveVM), and merely need to register such tokens in the Token Module to enable composability.
The universal interface is comprised of four basic functions: mint, burn, transfer, and balanceOf.
Collateral Requirement Module
The Collateral Requirement Module enables independent protocols to coordinate the use of collateral simultaneously, thereby enabling cross and unified margin at the blockchain level. To do so, it defines two elements: a collateral requirement, and a collateral requirement manager.
A collateral requirement is a function of token balances that determines whether or not a certain threshold of value is met. Collateral requirements can be attached to balances via the Data Permissioning Module, and are granted write permission over the balances to which they are attached. Should a balance change such that the collateral requirement is no longer met, the requirement can atomically trigger a liquidation.
The collateral requirement manager enables the composition of collateral requirements and maintains a list of sets of requirements on a per account basis. The collection of sets of requirements attached to an account represents all of the conditions that must remain true in order for the account to remain solvent. The collateral requirement manager enables users to permission multiple protocols to add or remove collateral requirements simultaneously by providing a formal structure for combining multiple collateral requirements into a unified requirement that can be checked whenever any relevant balance changes.
Together, these elements create a new class of on-chain financial activities: users can take out loans, post collateral, and open leveraged positions across multiple protocols without fragmenting value between them, enabling cross and unified margin at the blockchain level. Thus, the capital efficiency improvements enabled by the SVL positions leviathan-free finance to outcompete its centralized counterpart.