ETHSP Primary Market
Primary market particpants are defined as any market actor directly involed in issuance, redemption, and arbitrage of ETHSP by interacting directly with the Portfolio Protocol.
As a multi-pool strategy, ETHSP contains two sub-portfolios: ETHSP-A and ETHSP-B.
Issuance and redemption features may be accessed through the Portfolio Interface (opens in a new tab). Arbitrage must be performed via direct interaction with the Portfolio Protocol.
Due to transaction costs and robust inventory requirements for participating in the primary market, depositors should first explore secondary market offerings of ETHSP.
Issuance
- Approve the Portfolio Protocol contract to transfer ETHSP-A and ETHSP-B.
- Deposit a combination of ETHSP-A and ETHSP-B into the Portfolio Protocol ETHSP liquidity pool. Depositors recieve an ERC-1155 non-fungible token representing their position in the ETHSP liquidity pool.
- Depositors may then wrap this ERC-1155 into the ETHSP ERC-20 at their discretion using the Portfolio Interface.
Redemption
- Unwrap the ETHSP ERC-20 token into an ERC-1155.
- Approve the Portfolio Protocol contract to transfer the ETHSP ERC-1155.
- Execute a withdraw, burning the ERC-1155. Depositor recieves a combination of ETHSP-A and ETHSP-B tokens.
Arbitrage
ETHSP relies on competitive arbitraguers consistently rebalancing its underlying liqudity pool. As a multi-pool strategy, ETHSP arbitraguers must retain inventory of ETHSP-A and ETHSP-B tokens. To read more about these tokens, explore the ETHSP-A and ETHSP-B primary market guides.
ETHSP Liquidity Pool
Pool ID:
Parameterization:
Transaction Costs
Transaction costs are a primary concern amoung Ethereum arbitraguers and order flow providers. Various transcation types within the Portfolio protocol may be combined together, resulting in substantial gas savings.
The table below outlines a simulated gas report for relevant USDPG arbitrage transactions.
| Transaction Type | Avg. Gas Cost (wei) |
|---|---|
| Single Swap from Portfolio Balance | 299,295 |
| Allocate from Portfolio Balance | 335,996 |
| Deallocate to Portfolio Balance | 242,996 |
| Allocate and Deallocate from Portfolio Balance | 153,932 |
View Complete Gas Optimization Results on Github (opens in a new tab)
Liquidity Profile
In the world of arbitrage, the concepts of market depth and slippage serve as critical measures that allow a direct comparison between venues. Depth, broadly speaking, is a measure of how a given trade size affects the market price, while slippage in our context describes the difference in quote and executed price for that given trade. Although these two measures are heavily related, they can each be used to examine different peices of the arbitrage puzzle. Looking at the depth of various venues allows us to compare the effeciency of trades on these venues around the current price, while looking at slippage allows us a more direct measure of the effectiveness of a given arbitrage trade.