Sensory encoding. (A) Stage 1: Luminance changes in the visual input evoke bursts of APs in the retina, where the burst frequency is proportional and burst latency is inversely proportional to the luminance. Bursts are numbered in the order of generation time. (B) Stage 2: bursts are filtered by the SMOs of a layer of neurons. The SMOs propagate within the transversal plane with a radial spread and depolarize the neurons in a specific order. Only single AP components of bursts will pass the layer, specifically those APs that coincide with the SMO peaks of the given neuron. Gray patches represent neurons with SMOs. As a result, APs will be aligned to the intrinsic SMO of these neurons. (C) The complete burst sequence is converted to a sparse AP phase code, with the topography preserved. The latency of the action potential in SMO cycles is inversely proportional to the luminance and the spatial coordinate of the action potential generating neuron is encoded by the phase relative to any single instance of SMOs (phase code).