In the world of decentralized finance (DeFi), there are numerous avenues to earn additional token rewards by participating in various third party protocols, and one such avenue involves participating as a lender in a lending-borrowing protocol. When you lend your coins to borrowers, they are obligated to pay interest on the borrowed amount. As a lender, you receive this interest as a reward for providing your funds to borrowers.
Asset Pools suppliers can earn interest through deposits and can withdraw assets at any time. Assets in Asset Pools will be borrowed by borrowers who already deposited enough collateral assets as collateral, and they will also count the interest with time going.
Similarly to Compound collateral tokens, Scallop also tokenizes debts on the protocol known as sCoins (Scallop Market Coins). sCoins also have an ever-growing value, it's proof that you deposited some coins to the assets pools and allow claiming of deposited assets. The Market Coins allow the construction of positions without needing to interact with underlying assets and can be used to create derivative products that include debt obligations.
It is important to reiterate that "pools" and "sCoins" simply comprise autonomous blockchain-based smart contracts deployed on the relevant blockchain network, operated directly by users calling functions on it (which allows them to interact with other users and/or engage in trading or other activities in a multi-party peer-to-peer manner). There is no further control by or interaction with the original entity which had deployed the smart contract, which entity solely functions as a provider of technical tools for users, and is not offering any sort of securities product or regulated service nor does it hold any user assets on custody.