FlexiblePortfolio is a contract that serves as a portfolio of funds managed by the portfolio manager.
FlexiblePortfolio allows the portfolio manager to define allowed debt instruments that the portfolio will handle. This is the latest iteration of the previous portfolio contract version (called ManagedPortfolio).
FlexiblePortfolio
FlexiblePortfolioFactory
FlexiblePortfolio satisfies ERC-4626 requirements, meaning it meets all features described here.
FlexiblePortfolio supports loans that yield both principal and interest amounts on repayments. That is, the principal amount goes straight to portfolio liquid funds and can be withdrawn/lent at any moment. Interest is split between all lenders proportionally to the amount of portfolio tokens they hold. This implies that if the tokens are held in a contract (e.g. Uniswap pool), the interest will be frozen in the portfolio.
FlexiblePortfolio valuation is handled by the ValuationStrategy, which is a contract that holds information on all the loans the portfolio holds and can evaluate them properly. This requires the portfolio to call onInstrumentFunded when a loan is funded and onInstrumentUpdated when a loan might change its status (e.g. is repaid or gets defaulted). Valuation strategies cannot be switched as they hold the state of the portfolio loans.
Whenever an action that changes FlexiblePortfolio value is performed (fundInstrument/repay/deposit/mint/withdraw/redeem/updateAndPayFee), a fee for the TrueFi DAO is calculated and immediately transferred to the TrueFi DAO Treasury address. The fee is deducted from the FlexiblePortfolio value, so actions like borrow/withdraw/redeem cannot move the funds that are designated as fees. If the accrued fee cannot be repaid at the moment because of the lack of liquidity, additional information about the fee amount is stored in the contract and will be used to make the overdue payment the moment it will be possible. The same behavior is followed by the fee of the manager.
The protocolAccruedFee value is equal to:
(current_timestamp - last_update_timestamp) / YEAR * protocol_fee_rate * portfolio_value
The managerAccruedFee value is equal to:
(current_timestamp - last_update_timestamp) / YEAR * manager_fee_rate * portfolio_value
**protocol_fee_rate is the rate taken from the Protocol Config contract the last time an update was made. The same goes for manager_fee_rate, which is taken from Fee Strategy
Functions enabling Lenders to deposit/withdraw funds to/from the contract can additionally be limited by Deposit/Withdraw Strategy. These strategies (if set), are called with a hook every time a specific action is performed on the contract. The same calldata as for the initial call is passed to them, and then the strategy independently decides if this action can or cannot be performed. The strategies might also write some state to themselves on such hooks, but this is not a mandatory behavior. Additionally, these hooks can return a fee that would be applied for the action that is being performed. The fees are calculated independently by the strategy and have to be returned as absolute values and always in assets(not shares).
Here we present a few examples to better understand this process:
deposit(assets: 100) is being called, the strategy onDeposit() returns (true, fee: 10). This means that 10 would be transferred to the manager, and the shares would be minted to the Lender based on the remaining 90.
mint(shares: 100) is being called, the strategy onMint() returns (true, fee: 10)
Let’s assume shares:assets are 1:1. 100 has to be transferred to the portfolio and 10 to the manager to satisfy the fee and the Lender’s desire to have 100 shares minted. We calculate the fees for withdraw/redeem the same way.
This contract serves for deploying a new Flexible Portfolio. All of the FlexiblePortfolio parameters are chosen by the portfolio manager, except for ProtocolConfig.
Configurable lending pools governed by 3rd party PMs
For technical docs, see
Flexible Portfolios are configurable lending pools run by independent managers on TrueFi infrastructure. 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 , as well as crypto-focused borrowers (institutions, DAOs, etc., as covered by Bloomberg ).
Portfolio managers define who can lend into each portfolio (i.e. whether portfolios are permissioned or permissionless).
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.
For , lenders can gain access to the portfolio by completing onboarding per the manager's instruction (ex. completing KYC process directed by the portfolio manager).
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 funds only after the portfolio's maturity date. Funds are locked up in the portfolio until the portfolio’s maturity is reached.
