Arbitrageurs

• Portals earn yield by staking deposited tokens

• These accrued assets can be purchased by anyone with a fixed amount of PSM

• When the value of the Portal’s earned assets exceeds the value of the PSM needed to buy them, it creates an arbitrage opportunity

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Each Portal is created with a setting that determines a fixed amount of PSM which can buy the entire balance of its accrued tokens.

For example, the HLP Portal receives USDC by staking users’ HLP. This accrued yield can be purchased by anybody with 100k PSM. In Portals V2, the arbitrage amount is 100k PSM as well.

Once the value of the accrued Portal yield exceeds the value of the 100k PSM, a riskless profit can be made by buying the accrued assets with PSM.

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Additionally, 10% (V1) or 20% (V2) of the PSM used to buy the Portal’s yield is sent to the funding reward pool, which can then be claimed by bToken holders. Once the bToken holders have all been paid back in full, 100% of the PSM will go to the Portal.

This is an effective means to continue funding the Portal with PSM to pay out to depositors. It’s a predictable arbitrage scenario where the arbitrageur wins by making “free money” while the users win as the Portal can continue paying them PSM tokens.