# Pods

Pods are the foundation of the Peapods protocol, allowing users to wrap one or more underlying assets into a single ERC-20 token. Pods enable volatility farming and generate yield from market fluctuations.

* **Flexible:** Pods can take the form of an index by [wrapping](#wrapping) multiple assets, or a synthetic version of a singular asset.
* **Fully Collateralized:** Pods are always 100% backed by the underlying assets, ensuring security and transparency.
* **Value Accrual:** Over time, Pods can accrue in value versus TKN if they include a pTKN burn fee (see [Protocol Fees](/pods-2/fees.md)).
* **Arbitrage Opportunities:** When the price of the wrapped token (pTKN) deviates from the underlying asset (TKN), arbitrageurs can take advantage of this discrepancy, generating fees for the protocol.

<figure><img src="https://lh7-us.googleusercontent.com/7UyfWLGXXx-hOLrIK1oC_g98bmC4wsYH6V_7F8xdvLYqBmJ1SZHqeBB5669a9nRVfYjygiGY-KAR9yGD2ufz-uNSLT5daMgp_C49xohYAsLyvOduwWd-QjLnzq6PE33MkMnPJLD95urptGyvDuHIU_w" alt=""><figcaption><p>Each pTKN burn increases the value of each pTKN vs TKN</p></figcaption></figure>

## Multi-Asset Pods

All multi-asset Pods on Peapods have a set weight per asset that make up the Pod when created. These Pods do not depend on the market value of the tokens and anyone can create them at any time.&#x20;

## Decentralized & Trustless

In contrast to conventional and certain crypto methodologies which function off a more centralized asset management style of structure, our framework is entirely decentralized which means that there is no central management from the team or any individual at any stage after a Pod has been launched.

Investors can engage autonomously and, by becoming a fund liquidity provider, earn fees based on asset volatility.


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