Portals

Where does Portals’ yield come from?

The yield of a given Portal comes from the underlying protocol’s yield generating pool. Yield for Portals V1 is generated from HLP staking at hmx.org and yield for V2 originates from the lending pools of Vaultka.

What are the risks involved with using Possum Portals?

There are two “layers” of smart contract risk to consider when using Portals.

First, there’s smart contract risk for the projects that we use as a yield source. Second, there’s the risk inherent in the smart contracts of the Portals themselves.

However, unlike many DeFi products, Portals has no liquidation risk or counterparty risk.

Apart from technical risks, there might be centralisation risks and economic risks, depending on the assets involved in staking.

How much upfront yield can I claim from Portals?

The yield amount claimable depends on the state of the Portal internal LP. You sell Portal Energy (the time value of your tokens) for PSM which you then can exchange for any other asset or hold to participate in the Possum ecosystem. The easiest way to know how much yield you can claim is to simulate it using the Portals frontend. https://portals.possumlabs.io/

How can I participate in Portals arbitrage?

Arbitrage opportunities occur frequently in Portals where accumulated yield is converted back into $PSM. You find a guide here.

How is the APR calculated?

Portal Energy (PE) is the representation of the time value of staked assets. 1 token staked or locked for 1 year generates 1 PE for the user.

To get yield, PE is sold via the internal LP and the user receives PSM. PSM has a market value in USD, and so the received upfront yield in PSM can be expressed in USD.

The staked capital also has a value in USD. The calculation of APR now becomes straight forward: APR = (PSM_received * PSM_price * lock_time_in_seconds) / (principal_staked * principal_token_price * 31,536,000) Beause generating 1 PE by definition means locking 1 principal token for 1 year, we can simplify: valueReceived = PSM_received_for_ONE_PE * PSM_price valueStaked = ONE_principal_staked * principal_token_price APR = valueReceived / valueStaked

Who is the counterparty to upfront yield stakers?

Upfront yield takers effectively take a short position on the yield rates, so there must be someone taking the long position which we define as the counterparty. In Portals, the counterparty risk is spread among 3 different groups:

• The most direct counterparty are yield speculators who buy PE (tokens or internal balance) because they assume yield rates go up, hence they could sell it for more value later.

• The next counterparty are the Portal funders who make their PSM available as initial upfront yield in exchange for potential gains later, if the Portal performs well and pays back the debt. (bTokens)

• All PSM holders collectively are the ultimate counterparty. Every time PSM is received as upfront yield, the circulating supply of PSM increases, potentially depressing the PSM price if sold. However, the yield generated by the TVL in Portals is automatically used to buy back PSM and refill the smart contract in a permissionless way via arbitrage.

PSM is a fixed supply token and Portals have a fixed amount of PSM that can be paid out as upfront yield.

Why should I use Possum Portals instead of directly depositing into the underlying protocol?

It depends on your time preference and what you plan to do with the yield. Earning yield over time is a well established method to grow your capital passively. Getting yield upfront enables you to use this yield in different ways and is particularly suited for active investors.

Since capital in Portals can be unlocked anytime by repaying the unearned upfront yield, you can also think of upfront yield as a "loan" without liquidation risk that rewards you with interest instead of compounding borrowing expenses.

How does Portals fit into Possum Labs’ product suite?

True to our positive sum philosophy, Portal contracts are immutable and don't have privileged admin access or value extraction via protocol fees. Yes, zero fees. You can think of Portals and other upcoming protocols as public goods that solved the economic sustainability problems often associated with public goods.

Can a Portal run out of PSM tokens?

In theory, it is possible, but in practice it won't happen if the Portal is functional.

The infinte price range of the internal liquidity pool of PSM & Portal Energy effectively prevents a Portal from running dry.

Further, the arbitrage opportunity presented by swapping PSM tokens for a Portal’s accrued yield serves as a mechanism to refill the liquidity pool of Portals. It is a closed loop system that is sustainable long term.