# Flexible Portfolio contracts

**`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`).

<table><thead><tr><th width="260">Contract Name</th><th>Address</th></tr></thead><tbody><tr><td>FlexiblePortfolio</td><td><a href="https://etherscan.io/address/0x5c6b0d8070ddc0a6a85c460819c3a91c628070ec">0x5c6b0d8070ddc0a6a85c460819c3a91c628070ec</a></td></tr><tr><td>FlexiblePortfolioFactory</td><td><a href="https://etherscan.io/address/0x122d3ba54975bdeb7579938fb0ffc54f8baefd2a#readProxyContract">0x122d3ba54975bdeb7579938fb0ffc54f8baefd2a</a></td></tr></tbody></table>

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`FlexiblePortfolio` satisfies [ERC-4626](https://ethereum.org/en/developers/docs/standards/tokens/erc-4626/) requirements, meaning it meets all features described [here](https://eips.ethereum.org/EIPS/eip-4626).&#x20;

`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 That is, the principal amount goes straight to portfolio liquid funds and can be withdrawn/lent at any moment.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.&#x20;

### Valuation

`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.

### Fees

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:&#x20;

`(current_timestamp - last_update_timestamp) / YEAR * protocol_fee_rate * portfolio_value`&#x20;

The `managerAccruedFee` value is equal to:&#x20;

`(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

### Deposit / Withdrawal Strategies

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).&#x20;

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.

### FlexiblePortfolioFactory&#x20;

This contract serves for deploying a new Flexible Portfolio. All of the `FlexiblePortfolio` parameters are chosen by the portfolio manager, except for `ProtocolConfig`.