# Potions Potions are a key component of the closed volatility farming ecosystem, enabling users to benefit from market fluctuations and generate yield through creating derivatives, providing liquidity and/or executing arbitrager opportunities. Potions leverage parallel liquidity model to create a closed ecosystem for democratized arbitrage. How Potions work: 1. Creating Derivatives: Original assets (e.g., YEL) are wrapped into derivative tokens (e.g., lYEL) through the Potions ecosystem. 2. Parallel Liquidity Pools: A secondary liquidity pool is created with the derivative token (e.g., lYEL/USDT), existing alongside the original liquidity pool (e.g., YEL/USDT). 3. Price Variances: Since derivative and original assets are not directly tied, price discrepancies naturally occur between these pools, creating arbitrage opportunities. Key Benefits of Potions: * Yield Generation: Users collect competitive yield by holding derivative tokens or providing liquidity; * Arbitrage Opportunities: Structured price variances between pools allow users to capitalize on market fluctuations; * Sustainability: The system ensures a balanced ecosystem by incentivizing all participant roles through rewards and fees; * User Flexibility: Options for simple or advanced strategies cater to both beginner and experienced users. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://yield-enhancement-labs.gitbook.io/yield-enhancement-labs/products/potions.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.