Implementation and Architecture

This section of the whitepaper describes the implementation and architecture of Woodrip.

Woodrip Protocol is coded in Solidity, and all BNB Chain accounts can interact with the platform. Woodrip provides interfaces to market participants such as borrowers, depositors, and liquidators, etc. Woodrip is built on BNB Chain and utilizes ShuttleFlow to interact with cross-chained Ethereum or Bitcoin assets. The advantages of using BNB Chain are:

• The performance of BNB Chain is superior and the transaction fees are lower than Ethereum.

• Improved liquidity possibility. E.g. wBTC, imBTC and alike are supplied/collateralized through dBTC, and enjoy shared liquidity through this method

Money Market

Woodrip creates an independent money market for each asset, also known as the lending market. Assets on Woodrip Protocol are mapped into BEP20 tokens on BNB Chain: dToken. The borrowers transfer their assets to the contract, and their assets can be converted into dToken; over time, the borrowers can gain dToken interest returns. Table 2 list the initial batch of assets launched by Woodrip and the corresponding dToken information:

Asset	Type	ctoken (ERC777)	dtoken (ERC777)
BTC	Cross-Chain	cBTC	dBTC
ETH	Cross-Chain	cETH	dETH
USDT	Cross-Chain	cUSDT	dUSDT
DAI	Cross-Chain	cDAI	dDAI

Interest Rate

Similar Compound, Woodrip's money markets are defined by a pair of current interest rates (supply and borrowing interest rates), which are applicable to all users. Over time, this pair of interest rates will be adjusted once changes in supply and demand take place. For every money market, every change in interest rates is controlled by the Interest Rate Index. The change of the interest rate is a result of user actions such as supply, withdrawal, borrow, repayment or liquidation of assets. User balance includes accrued interest, which is the ratio of the current interest rate index divided by the interest rate index when the user balance was last updated. The balance of each account address in the money market is stored as an account checkpoint. The account checkpoint is a Solidity tuple <uint256 borrows, uint256 interestIndex> that describes the interest rate index and the borrowing balance when the account was last updated. The current interest rate index of the money market is also stored globally. Each time a transaction occurs, the asset's supply interest rate and borrowing interest rate index will be updated to the compound interest from the previous period of the index. The interest is priced at r∗ t during the period of use, and calculated at the interest rate of each period.

$$Index_{(a,n)} = Index_{(a,n-1)}*(1+r*t)$$

Market Exchange Rate

Assets circulate in the money market a, therefore the amount of dToken will continue to grow with market interest. We set the exchange rate of fToken according to market supply and demand, which is the market exchange rate of fToken as well.

$$Exchange Rate_a = (Cash_a + Borrows_a *0.9) / Supply_a$$

$$Exchange Rate_a = (Cash_a + Borrows_a *0.8) / Supply_a$$

More borrowings result in a higher market exchange rate when the deposit remains unchanged. The depositor's dToken balance can be exchanged for more assets, and the assets that are exchanged by the dToken balance are the deposit interest. The constant 0.9 is to express the difference between the supply interest and the borrow interest rate of non-stablecoins and that 10% of the borrowing interest is distributed to team. The constant 0.8 is to express the difference between the supply interest and the borrow interest rate of stablecoins and that 20% of the borrowing interest is distributed to team.