"Mommy, where do Assets come from?"

Producers are the source of investment assets on the Itos platform. They create positions for users and pass them to the PM. For example, the Money Market producer creates Borrow and Lend positions for users, the 2sAMM creates different LP positions, integrators import positions from other protocols, etc.

These positions are passed to the PM to get cross-margined and ultimately the portfolio they're deposited in is checked for solvency.

Technical Specification

On a technical level, any DeFi primitive can be a producer as long as it reports credits and debts for the asset it creates according to the PM interface. However, only primitives that have been audited, approved by governance, and passed a preliminary test period can become an accepted Itos Producer. Only then, are their assets eligible for cross-margining.

The PM-required interface is as follows:

  • There is no restriction on how users create assets on the producer, but ultimately the producer must install the asset with the PM.

  • Anyone can call a producer at any time to retrieve a Record of the value of any asset created by said producer, unless the asset has been uninstalled.

  • In said Record, the token credits is what the PM receives from the producer on close, and the token debts is what the PM pays (sourced from the closer) to the producer. The Deltas are chosen by the producer.

  • The PM can uninstall an asset from the producer at any time.

  • The PM can split an asset at any time.

Producer Types

The two most important Itos-native producers are the The 2sAMM and the Itos Money Market. Besides them we also have Producers which are Bundlers and Integrators.

A Bundler is a special type of producer which combines assets from other producers into one asset. This allows for asset aware management/risk-reporting which results in tighter risk bounds and more capital efficiency. This also ensures the entire bundle of positions are liquidated together. If a user were to simply open the bundled positions individually, then its possible for a position's hedge to get liquidated while the formerly hedged position remains open.

An Integrator is a special type of producer which creates positions on external protocols on a user's behalf and conforms the asset into the PM's interface. For example, Pendle positions are more complex than simple tokens so the Pendle Integrator is specially written to translate those risks into an interface the PM can understand.

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