Flexible Portfolios [legacy]
Configurable lending pools governed by 3rd party PMs
Last updated
Configurable lending pools governed by 3rd party PMs
Last updated
For technical docs, see Flexible Portfolio contracts
Flexible Portfolios are configurable lending pools run by independent managers on TrueFi infrastructure. Portfolio Managers ("PMs") have discretion over loan terms, as well as other items such as the pool's maximum size, maturity date, and lender access/restrictions.
Portfolios can serve real world financing borrowers and use cases, as covered by PYMNTS here, as well as crypto-focused borrowers (institutions, DAOs, etc., as covered by Bloomberg here).
Portfolio managers define who can lend into each portfolio (i.e. whether portfolios are permissioned or permissionless).
For permissioned portfolios, lenders can gain access to the portfolio by completing onboarding per the manager's instruction (ex. completing KYC process directed by the portfolio manager).
Portfolio Managers (PMs) make decisions on underwriting loans, managing relationships with borrowers, and configuring portfolios. Lenders are responsible for conducting diligence on PMs and portfolios before lending.
Lenders can withdraw funds only after the portfolio's maturity date. Funds are locked up in the portfolio until the portfolio’s maturity is reached.
No, portfolio tokens are non-transferrable by default.
Managers can enable transfers if desired.
Portfolios pay a protocol fee per annum to the TrueFi DAO treasury. Fees accrue block-by-block and are paid upon each smart contract interaction (lend/withdraw/disburse loan/repay loan).
The example below illustrates how the protocol fee works:
Protocol Fee example
Take an example portfolio Verum Fund, which holds 1,000,000 USDC worth of loans and assume protocol fee = 50 bps per annum (0.50%).
Assuming the value of Verum Fund grows linearly from 1,000,000 USDC to 1,100,000 USDC over the course of 30 days (avg. value of 1,050,000 USDC), the portfolio would pay a protocol fee of 431.51 USDC for this time period:
Protocol fee = 1,050,000 USDC * 0.50% * (30/365) = 431.51 USDC
Additionally, PMs can set an optional Portfolio Fee. Portfolio Fees are paid to the PM, and can be configured such that they are accrued linearly over time, or paid as a flat fee at time of deposit and/or withdrawal.
