# Green Arrow Pods

Our first iteration of Pods (Legacy Pods) deployed on the Peapods protocol were backed 1:1 by their underlying assets with no deviation to this backing. All future versions will be built as Green Arrow Pods and will include the option to include a burn fee which uses a portion of (un)wrap fees to burn the Pod token (pTKN).

This mechanism will increase the backing of each pTKN with every (un)wrap transaction through the Pod which means that the value of pTKN continues to increase beyond the initial 1:1 backing ratio of pTKN:TKN.

As a result, each pTKN can (excl. fees) unwrap more TKN than was initially wrapped to mint the token.

<figure><img src="https://lh7-us.googleusercontent.com/8G8-sOJfCG4oDW4Tgg8B3mIWnhzmjiFTOnFiJjGuzWKKWZ0koJfq94OubWF6RYYlhpkk8kgGh7nJPdlC_gns4fjvz6UzJM4bNfDvwXRKVddgIcT7gFhTOUkMHS3C5khe7TNFt2EDTSKg9LNivQTQkXU" alt=""><figcaption><p>Each time fees are accrued by the protocol, a portion of these are used to burn pTKN and increase the backing of TKN per pTKN.</p></figcaption></figure>

## How do Green Arrow pods work?

When a Pod is created, the creator has the option to add a Burn Fee % to the Pod. This determines the portion of fees used to burn Pod tokens (pTKN) whenever fees are accrued to the Pod.

The underlying assets of the Pod (TKN) remain unchanged which results in an increase in the ratio of TKN backing per pTKN.

Pod token holders can unwrap their pTKN at any time and claim a % of the underlying TKN equal to their % holding of pTKN. This means a user can increase exposure to TKN by passively holding pTKN.\
\
The protocol uses a formula called a Collateral Backing Ratio (CBR) to show the value of pTKN measured against TKN. This formula is determined by dividing the underlying TKN collateral by the total supply of pTKN. As pTKN supply is always reducing vs the underlying TKN collateral, this number will always increase.\
\
Users can use the below formula to determine the quantity of TKN they can expect to receive when unwrapping pTKN;\
(pTKN\*CBR)\*(100%-Unwrap Fee%)\
\
Using pPEAS as an example, this formula would look like this;\
(pPEAS\*CBR)\*0.993

<figure><img src="/files/9EswccP7pYipL81nEiKk" alt=""><figcaption><p>pTKN supply is reduced via the burn fees, whilst the underlying TKN collateral remains the unchanged, resulting in a higher claimable ratio of TKN per pTKN held.</p></figcaption></figure>


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