In order to create synths on the Spartan Protocol, users need to first hold (or purchase) SPARTA tokens. With these tokens, users can interact with the Synth Contract. This SPARTA is then added as an asymmetric-liquidity-add to the relevant pool. These LP tokens are then held at the SynthFactory; which handles the minting of synthetic assets.
Synths can be enabled for the creation of any asset enabled by the DAO. As communicated above, the protocol first enables this with the assets that have the deepest liquidity pools. Synths mimic the value of the created asset (i.e., BNB). The value of locked SPARTA needs to remain at or above a certain threshold of the synths created. This is automatically calculated, the exact threshold has yet to be communicated. However, the collateral position percentages can be tighter on Spartan Protocol than typical implementations due to the internal pricing mechanism and BSC's fast transaction times.
By creating these synthetic assets, users basically enter a long or short position of the created asset. The LP tokens (and underlying base assets) acts as collateral, whereas the minted assets act as debt. If the value of the locked SPARTA tokens increases, the protocol automatically releases part of the locked tokens. This liquidity can then be used to create more assets again, if wished, to further increase the position.
A special 'compound contract' has been proposed and implementations have already been built with the purpose of enabling users to plug in synthetics to either increase or decrease the leverage of their position. This may or may not make it to the mainnet implementation as it's own separate contract, but the point is that there is a focus on providing the ability for decentralised peers to leverage up their positions in this ecosystem!
The protocol uses internal pricing directly connected to the liquidity pool values. This means there is no reliance on other oracles or externalities.