🧪Synthetic Potions

Synthetic Potions are ERC-20 standard tokens that track the prices of real stocks, commodities, ETFs, and other assets.

Potions (pTokens)

pTokens are ERC-20 and BEP-20 compatible tokens. As such can be traded or swapped on any decentralized or centralized exchange.

pTokens possess the following properties:

Name & Symbol

Describes the underlying real-world Stock the pToken is supposed to track. Apple, Google, Microsoft, Tesla, Meta and more.

Minimum Collateral Ratio

A Vault that mints the pToken cannot have a collateral ratio below this value, otherwise it will be subject to liquidation. pGOLD and pSLVR have a liquidation ratio of 130%, while all other pTokens have a liquidation ratio of 150%. If your Vault's ratio falls below these values, your collateral is at risk of liquidation.

Price

pTokens are designed to be as decentralized as possible. Poison protocol gets underline stock prices from Chainlink decentralized price oracles https://chain.link/. Oracle Prices are used exclusively for determining collateral ratio of the Vault and do not affect pToken trading prices on decentralized or centralized exchanges.

Liquidation Discount Rate

For a VAULT subject to liquidation, describes the discount for which its collateral can be purchased.

Vaults

New tokens for a listed pToken can be minted by opening a vault with any supported collateral token. The vault is essentially a short position against the price movement of the reflected asset, if the price of the asset rises, minters of the pToken would be pressured to deposit more collateral to maintain the collateral ratio.

Collateral Ratio

The collateral ratio (Cratio) is simply the ratio of the value of a Vault's locked collateral to the value of its current minted tokens.

cRatio = collateral / pToken amount * pToken price

As a general rule a vault should always maintain Cratio above 150%, except for pGOLD and pSLVR, which have a minimum ratio of 130%.

Vault Operations

Only one operation per block is allowed. The exception to this is that when closing a vault while holding sufficient pTokens, any pTokens are burned and collateral is withdrawn automatically. In this way you can combine the Burn and Withdraw transactions.

Opening a Vault

Users are allowed to set the initial Cratio for their Vaults as long as it meets or exceeds the mandated minimum collateral ratio (minCratio). Poison protocol calculates maximum amount (maxAmount) of pTokens that can be minted and issues pTokens up to maxAmount.

maxAmount = collateral / minCration * 100 / pToken price

Deposit

With an existing Vault, the user can deposit additional collateral to raise its effective Cratio.

Withdraw

The user can withdraw collateral against the Vault to adjust the value of their Vault's effective Cratio. The user can only withdraw up to maxAmount that is needed to maintain the Vault's effective Cratio above the minCratio.

maxAmount = (collateral / minCratio * 100) - (pToken amount * pToken price) * minCratio / 100

Mint

The user can also mint pToken against the Vault to adjust the value of their Vault's effective Cratio. The user can only mint up to maxAmount that is needed to maintain the Vault's effective Cratio above the minCratio.

maxAmount = (collateral / minCratio * 100) - (pToken amount * pToken price) / pToken price

Burn

In addition to deposit operation, with an existing Vault, the user can burn pTokens to raise its effective Cratio.

Close

If a user wishes to collect all their collateral from the Vault, they must close their position by returning the outstanding balance of minted pTokens, which the protocol will burn. The user will be then be able to withdraw their locked collateral. If you hold all minted pTokens, Closing the vault will automatically burn all pTokens and withdraw collateral.

Liquidate

A Vault can be liquidated when it falls below the minimum collateral ratio. At this time, if the owner does not quickly act and deposit more collateral or burn pTokens to deleverage their position, other users may purchase their Vault's collateral at a discount, by burning outstanding balance of minted pTokens.

Protocol Fee

The Poison protocol fee is charged whenever a withdrawal from a Vault is made (including closing the Vault). Also the fee is charged during liquidation. This fee is then converted into POI$ON half burned and the rest is distributed as LP rewards through Master Castle. Currently closing a vault is a 1% fee, while liquidations generate a 2% fee.