Portals v2
In Portals v2, users will take on the same roles – depositors, funders, and arbitrageurs – but new architecture is implemented which will benefit each role. The primary upgrades in v2 are the shared liquidity pool and NFT depository receipts.
Shared LP
The biggest architecture upgrade in Portals v2 is the implementation of a shared liquidity pool, or LP, which is connected to all v2 Portals. When Portals v2 is launched, it will feature six Portals with one shared LP.
This is different from the Portals v1 architecture, in which each Portal had its own LP.
The v2 architecture also allows new Portals to be added to the shared LP during a limited time, although there will be no additional funding if/when new Portals are added.
This change brings several efficiencies to the overall flow of assets, and changes the mechanisms for funders, arbitrageurs, and depositors to varying degrees.
Funders
In Portals v1, funders deposited PSM into the Portal during its initial funding period. In v2, they’ll instead deposit PSM into the shared LP.
Funders benefit from the collective activity of all Portals in v2, rather than the activity of whichever Portal they fund.
Similar to Portals v1, funders receive bTokens in return for providing initial funding. However, the redemption method in v2 is more efficient.
In v1, bTokens represented a claim on funding pool assets based on the total number of outstanding bTokens (that haven’t been burned yet). In this scenario, bToken holders would gain a larger share of future funding pool assets by waiting until other bToken holders burned their bTokens.
In v2, a funder can burn their bTokens for a constantly increasing amount of PSM which leads to a fixed APR. Because there won’t be enough assets to service all redemptions immediately, bToken holders who wish to redeem must do so when the reward pool holds enough tokens. As the LP receives more PSM from arbitrageurs, however, more bToken holders will be able to redeem their bTokens.
There are two caveats to the bToken redemption system in v2:
Funders must redeem their bTokens for at least as many PSM as they funded the Portal with (if you've funded the Portals with 1,000 PSM, you can't redeem your bTokens if there are fewer than 1,000 PSM in the funding pool)
Anyone else who has 1,000 bTokens or fewer can also redeem theirs at the same time. So, if you're not first to act, you'd have to wait for it to accrue another 1000 PSM
Arbitrageurs
As the above image shows, arbitrageurs are the least affected by the v2 upgrades. The largest difference is that they’ll interact with the LP rather than each Portal when depositing PSM.
While this may seem like a small detail, it still improves the overall capital efficiency of Portal assets. In v1, 10% of the arbitrageur-deposited PSM tokens sit idle in the funding pool. But in v2, all PSM are deposited to the shared LP and provide deeper liquidity for upfront yield.
Depositors
The enhanced liquidity from a shared LP also benefits depositors in the form of more consistent (and generally higher) APYs.
If each Portal had its own LP, some Portals would receive more funding (many funders would likely only deposit into the Portal(s) they thought would be the most popular). The result would be inconsistent liquidity. In this situation, the Portals with lower funding would have lower APYs, which results in the negative cycle of lower funding → lower APY → lower demand.
Meanwhile, the overall architecture for depositors stays the same: assets are deposited into a Portal, and automatically staked in the relevant protocol to earn yield (the initial six Portals will use Vaultka). For example, the ETH v2 Portal will pay upfront yield from the shared LP to depositors, and earn yield over time from Vaultka in esVKA, ETH, and USDC.
Depositors also benefit from the integration of NFT depository receipts, which are explained below.
NFTs
NFTs are a new feature of Portals V2. Whenever a user deposits assets into a Portal, they’ll have the option to receive an NFT as a receipt of their current deposit.
This option enables more capital efficiency for depositors, presenting two distinct advantages:
Improve capital availability – allows the depositor to transfer their staked position:
To another wallet they own, which enables earning upfront yield across multiple wallets
To another wallet, potentially even to sell on the open market, allowing others to speculate on future Portal APY
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