For generating interest payout and payin by treating the system as a numbers same, just like we did with the single sided prediction market in the previous post. There is a difference. Let us assume that a natural sequence exists in which all transactions equalize deposits and loans. As a result of folks emptying one basket into another, and avoiding the overflow and underflow, the the S&L can, within precision, construct this natural sequence of deposits and loans. By assumption.
Great, then this graph generator is like the series of bets in the previous post. Using it is simple, loans pay the interest payment for each step down, deposits collect for each step down this graph. Short term deposits, small frequent amount are a one step, earning one unit of interest for deposit, and in the other direction for loans. We have decomposed the S&L algorithm into a series of number bets over a variable length window. The natural sequence is quasi stable, held in place by the bit error process. Pricing risk shared, the bit error process known and bettable. Thre step cost of interest determined by the contract to keep deviations within bound, i is a volatility limit.
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