# Supply

When a user supplies funds to the protocol, they receive rTokens. We use the following formula (as per EIP 4626) to calculate the number of tokens minted to the user.

$$
rTokens\_{new} = \frac{Asset\_{new} \cdot rTokens\_{total}}{Asset\_{total}}
$$

The formula uses existing total rTokens supply and Total asset supply to decide the quantity of rTokens to be minted as per the user deposit.

$$
Asset\_{total} = Asset.balanceOf(contract) + Assets\_{lent} + Interest\_{accrued}
$$

```jsx
// Definitions
Assets_lent => Assets borrowed by borrower contract to issue loans to the user
Interest_accrued => Interest recievable by suppliers since last update
```

The contract exposes the following features for user and open contracts to interact with:

1. **User:** Technically, a user can usually perform 3 main actions with supplier contract: Deposit, Withdraw & Transfer. User can further use the received rTokens as collateral to borrow or stake to earn higher yield.

<figure><img src="https://84867213-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FEVOQHsfy83WcYZwHX4bB%2Fuploads%2FXHidU7aeYhCDMHaS4oJu%2Fimage.png?alt=media&#x26;token=de279616-e186-4378-bf68-72218508ad10" alt=""><figcaption><p>Fig. 2 - Supply use-cases</p></figcaption></figure>

2. **Open:** The supply contract provides special privileges to the Open contract to allow it for some book-keeping. These options include:

* Accrue the interest
* Lock/unlock supply - to prevent the transfer of collateralised supply
* Transfer & withdraw supplied funds on the users behalf - to liquidate the loan
* Borrow and repay - to utilise funds to issue & close loans