The eth accumulatoooor.
One great thing about crab is that it can stack ETH in a bear market. It tries to gain value in USD terms so when ETH goes down it tends to accumulate more ETH. The opposite occurs in a bull market, it tends to sell ETH off, trying to maintain $ value.
I have deposited $ETH for 2 months of Opyn Crab strategy.
- Deposit date: March 30
0.995ETH → 2.075384ETH
$3391.90 → $3673.78
During the bear market my $ETH doubled.
@opyn_
is fucking good
Hey Crypto Twitter,
It's been a while
This one's a tough one...
After the regulatory action against Opyn,
@alexisgauba
and I have made the decision that we are leaving crypto.
This is honestly really emotional for me and Alexis.
ok I need squeeth mentions to stop. I cant take this anymore. every day I am checking feed and it says squeeth. every day, check the feed, squeeth. I cant take this anymore, I have over-read squeeth, by a lot. it is what it is, but I need squeeeeths TO STOP. can devs DO SOMETHING
demystifying LPing squeeth
covered call-ish vs squeeth-lite
what are the ways to LP squeeth and why would I want to be an LP?
Check out the full (and mathy) details on medium here and read on…
nfa!
1/n
squeeth is a pure distillation of financial yin+yang - yield+convexity.
Option like convexity without strikes/expirations. Simplifies decisions, concentrates liquidity and an awesome defi lego.
Very excited to share our research!
Sip on this delicious leverage beverage soon.
I've been working on a new financial product with
@danrobinson
and the team
@opyn_
: the power perpetual.
If the price of ETH doubles, the ETH^2 power perp 4Xs, the ETH^3 power perp 8Xs, and the ETH^5 power perp 32Xs.
Lending protocols:
Broke - I'm earning risk free returns on my assets!
Woke - I'm taking illiquidity, insolvency, and smart contract risk on my assets.
Bespoke - I'm also selling floating premium otm/gap cliquets that I've priced using a stochastic local vol model.
Very honored to join the process at
@opyn_
to create squeeth! There are already lots of good threads and posts about what it squeeth is, BUT, if you are like me not from a finance background, here's a much easier explanation for you to blend into all the chats. A thread 👇
🗣️ CRAB v2 EARLY ACCESS SIGNUP TODAY 🦀
Bypass the caps on crab v2!
FOR A LIMITED TIME crab v1 depositors will be able to sign up for early access for crab v2.
This will guarantee your spot in crab v2 right when it drops!
Everything you need to know 👇
lets continue down the 🐱🐰🕳️ (squeeth rabbit hole)
squeeth, a power perp, tracks eth^2, but there is much more to unwrap vs just god-tier leverage
what is funding?
squeeth funding=implied eth variance
squeeth is a powerful vix like vol oracle (i❤️vix)
1\ SQUEETH is ETH²
It can be used to hedge Uniswap LPs and even options!
The funding rate is the variance of ETH.
What? HOW?!
What does that even mean? Where can I get some? CAN SOMEONE PLS TELL ME WHAT IS GOING ON?
A t🧵read about this…👇
If you buy Squeeth, what affects oSQTH Performance?
• Implied Volatility (IV)
• Funding (via the Normalization Factor)
• Value and Price Movement of ETH
• Price Impact (slippage)
Let’s look at each in more detail 🧠👇
Dropped new calculator for squeeth’s crab vol strategy.
It’s called CrabLab.
>>Today crab: Simulate crab returns from ETH returns
>>Yesterday crab: Compare funding to historical returns
>>Tomorrow crab: Estimate crab apy
Post →
Thread ↓
🚨 arb alert 🚨
new pool, who dis?
theres a (small) arb in this pool for the first person who can figure how to claim it
i'm biased but think this pool is super interesting for a lot of reasons. what could it be used for?
squeeth+power perps can improve option liquidity and pricing by acting as a hyper-liquid gamma/vega hedging instrument
- too much eth gamma, sell squeeth, buy some delta
- buyer of calls comes in, buy squeeth to hedge delta+gamma
- trade options tied up with net delta+squeeth
1/
Crypto option markets suffer from poor liquidity, fragmented across many strikes and expiries.
SQUEETH from
@opyn_
fixes by providing an easy way for option risk to be traded without strikes or expiries.
Follow SQUEETH Cat down thread to find out how it works 🧶
Moral hazard in a world of Maker 101% LR
Getting around to managing an old vault
I can:
a) repay my $DAI debt for net X USDC
b) withdraw excess USDC for 1.01X USDC
c) mint max DAI, sell for 1.007X USDC
d) wait for DAI < 1, paying SF
Maker stablecoin liquidations are coming
Fortune favors the brave (pre merge vol traders)
Pretty wild vol moves around the merge as folks adjusted or closed positions or put on merge trades.
Can see it directly in the crab strategy intraday PnL due to its exposure to implied volatility.
Notice during the same period between Sept 14 & Sept 15 Squeeth IV jumped significantly from ~120% to ~170%!
IV directly impacts the price of oSQTH. This jump in IV caused the price of oSQTH to increase from ~$128 to ~$141.
• Liabilities = oSQTH debt * oSQTH price * eth price
Daily crab auctions trading oSQTH for ETH are live at .
Quick thread on how the crab auction works, how you can trade Squeeth in size, and an example of how to participate 🦀
See medium for details:
While the last year has been challenging for Opyn, we have kept our heads down building. We have a new protocol that we will soon invite you to experience with us.
We're hyped to announce Opyn's next product: the Zen Bull Strategy!!🧘♀️🐂
Zen Bull allows users to stack ETH while maintaining 1:1 ETH exposure (delta = ~1)
The strategy performs best in zen (calm) markets when the price of ETH increases slowly!
amazing analysis of using squeeth to hedge price risk on cfmms from
@alpinechicken
stay tuned, more bangers coming out soon from the
@opyn_
research team as we explore how deep the power perp rabbit hole goes
lets take a trip down the power perp rabbit hole
squeeth is a type of power perp, but the design space for power perps is large
in defi, a lot of things, if you squint the right way, are power perps or can be made via a power perp
1/ What do stablecoins, perpetual futures, squeeth, and uniswap have in common?
They're all power perpetuals! Sort of!
@andrewjleone
,
@snarkyzk
and I wrote a paper about it that you should read.
Or at the very least you should read the 🧵 👇 🐱
We’ve always been focused on building innovative and novel products to build a better financial system and that will continue. Can’t wait to share more soon.
Excited to be launching on chain margined options. Large capital efficiency improvements for writers. Can often receive 3x+ yield on OTM option writing per $ of collateral. More if you want to actively manage your collateral.
RegT inspired margin is first, portfolio style next?
1/ 🥳 Date is set, partial collateralization is launching on June 29!
Inspired by reg T today we introduce the first-ever on-chain margining system for vanilla options, which is superior in its capital efficiency to any other proposed in DeFi
Details ↓
📚 Join us for a Squeeth learning group + AMA! 💧🦀
Venue: Twitter Spaces
Time: Monday, April 4 @ 10am PST
Speakers:
@andrewjleone
&
@alpinechicken
Topic: LPing in the SQTH-ETH pool & trading the daily Crab Auction
Sqrth has something we have shared a bit on and are excited to build. It is a ETH power perp with a 0.5 power.
0.5 power perps unlock interesting use cases including fee swaps, expected uniswap fee oracles, IL/LP hedging and synthetic uniswap LP positions.
18/n
@Rambulik_
@_Dave__White_
@danrobinson
@opyn_
For squeeth, roughly a 51% loss, neglecting funding that you have to pay.
(0.7^2 - 1^2)/1^2
You lose less than a 2x leverage perp on the downside and make more in the upside and have to pay funding in exchange for that convexity.
Super excited to be presenting today at 6:30pm PT on option trading, market making, risk management and future developments in the on-chain option space!
@opyn_
1. Congrats to the
@opyn_
team for launching V2 - very exciting! I’m happy that the new V2 dashboard has a clean layout with greeks and implied vols for each respective option. It’s also a pleasant surprise to see the prices are closely in line with
@DeribitExchange
's options.
I am incredibly grateful for the leadership of
@snarkyzk
and
@AlexisGauba
as well as the opportunity to work with them over the past 3 and a half years. I know they will be missed in the crypto world.
Bonus claim(s) for anyone reading to the end:
LPing on a oSQTH-USDC pool is fairly isomorphic to a ETH-USDC perp
The payoffs of an oSQTH-USDC LP and a ETHUSDC perp absent funding and trading fees are equal.
16/n
Lfcrabbbbb! Crab v2 is now live!!!!! 🎉
The strategy makes money in crab markets - when ETH is moving sideways, like a crab! 🦀🦀
v2 aims to deliver better yield and larger caps due to a new hedging mechanism ⚙️🦔
👉
Trustless
@opyn_
OTC trades on any ETH option you can imagine.
1. Create any ETH option you want on
2. Open a vault and mint if selling
3. Find counterparty on
#otc
on
@opyn_
discord or post a limit order on 0x via
4. Trade OTC!
4) OTC - taker
As an order taker, you simply goes to the taker tab and put in the encoded order you got from the order maker, and fire the transaction.
Super excited for this to be live! Unlocks significantly higher return on capital for
@opyn_
option writers. Defi options need to be capitally efficient to win.
Will be posting some threads this week about some of the interesting design decisions and mechanisms, stay tuned!
🎉 Partial collateralization is live on mainnet!
🚀 Enhanced leverage for short options
🤑 Sell MORE options to generate HIGHER yield
📊 Commit less capital, allowing more portfolio flexibility
This is a major capital efficiency improvement for DeFi 🥳
@bennpeifert
@_Dave__White_
@danrobinson
@opyn_
yep! they should decay with theta/funding over time and have a jump that corresponds to the funding paid at time of funding where there is 0 arb across a funding payment
A full range mint+LP position is similar to a covered call in some ways, excluding funding and trading fees.
You have an initial exposure similar to being long 1x ETH and get longer ETH as ETH goes down, shorter ETH as ETH goes up.
7/n
@WilsonCusack
Not sure on v3, but on v2 it compounds on someone interacting with the market. With relatively frequent interactions it approaches continuously compounded. If folks aren’t interacting frequently, folks aren’t using the product. Squeeth funding compounds in a very similar way!
why does metam*sk sometimes set the suggested max priority fee equal to the suggested max fee?
i always check this as i've seen it too many times to count, but how much extra gas has been paid/wasted by excessive priority fees by folks who don't check this?
@thiccythot_
I think one main issue is that (many) uniswap LP positions are underpricing vol. For many pools, trading volume/$ liquidity is too low relative to the pair vol.
For an average LP, they are probably not being compensated enough for the convexity they are selling.
Buying and LPing is buying oSQTH and combining it with ETH to LP
Minting and LPing is depositing ETH collateral, minting oSQTH, and combining it with ETH to LP
You can do both of these on on the LP tab (including depositing a LP NFT as collateral)!
2/n
When could it make sense to buy+LP?
•High trading volumes
•ETH will outperform funding on oSQTH, but not as bullish as wanting to hold 100% oSQTH
•Desire convex exposure to ETH
•Think funding is relatively low relative to potential ETH moves
6/n
My take on the AMM vs CLOB debate
The makers are often different
The takers are often different
The types/sizes of trades and assets they excel at are often different
They can coexist and serve different purposes
IMO the future of (option) trading includes both AMMs and CLOBs
The arb was risk free and profitable including gas fees for a range of sizes.
There was an optimal trade size, but was not profitable if the trade was too small due to gas and not profitable if the trade size was too large due to price impact.
ok, need
@12yearoldwithcc
to stop deleting posts. can't take this anymore. every day check post and its deleted. every day check post, deleted post. cant take this anymore, have over-followed, by a lot. it is what it is. but need posts to STAY UP ALREADY. can parents DO SOMETHING
Today, we are extremely excited to announce our latest product, the yvUSDC ETH Put Selling Vault!
This new product lets users to stack
@iearnfinance
and Ribbon yield by using Yearn Vault tokens as collateral for option writing.
Here's how it works 👇
If trading fees - oSQTH funding is higher than ETH-USDC perp funding it would have been wise to LP and short a perp (in a world with cross margin and easy borrowing/lending of LP shares).
17/n
When could it make sense to mint+LP?
•High trading volumes
•Want to be long ETH, but less bullish vs buy+LP
•Don’t want to be initially paying funding
•Fine w ETH upside reduced in exchange for trading fees
•Want leverage and capital efficiency for higher fees / $
10/n
Mint+LP users can deposit their uniswap LP NFT as collateral in their vault to increase their liquidation price or reduce ETH collateral required.
It is possible to have a vault with 0 ETH collateral if you deposit the NFT, which can improve capital efficiency.
11/n
The choice of mint+LP vs buy+LP really depends on your view of funding, ETH price trajectory and if you want convex or concave exposure, but there are some exciting ways to express different views of the future of ETH prices, funding and squeeth trading volume.
15/n
@WilsonCusack
happy to help brainstorm some mechanisms or answer more qs, we've done a lot of thinking about different strategies you could build on top of squeeth!
@jparklev
@wadepros
@WilsonCusack
1 mental model (there are many) for how the normalization factor (variable that adjusts collateralization) works is that it changes the target index
initially target is (eth/10000)^2 and over time the target decays to X*(eth/10000)^2, where X is less than 1 assuming funding +ve
@aparnalocked
@ljxie
Lived for 3 yrs in a diy camper van traveling around n america, some while working, some not. Happy to share info! Preferred off grid vs RV parks or campgrounds, so good solar system/batteries, cell boosters, wifi extenders were important. Usbc monitors are nice.
@0xdoug
@KentoInami
+perp for +ve funding w usd collat can be isomorphic to depositing in a lending protocol to earn +ve interest.
Can be modified for >1x leverage or coin margined
Perp funding rates are (theoretically) determined by difference btwn term rates in the underlying and quote markets
@WilsonCusack
a short oSQTH position has some exposure to the price of ETH based on the CR chosen
you are short something that has a eth^2 payoff and long some eth. the ratio of eth vs eth^2 exposure determines if you do better if the price of eth goes up, down, or not move at all
@samchepal
Yeah think AMMs will be more retail both on the LP and taker side.
Custom strategy AMMs could be something in the future that is adopted by inst makers.
From the inst taker side, think the biggest issue is liquidity but scaling and fast trade confirmation also quite important.
We are super excited to bring this new defi primitive to the world on Jan 10th.
Very bullish on the innovative products and use cases for power perps that we haven't even explored yet.
3/3
A full range buy+LP position is similar to an eth^1.5 payoff (squeeth-lite), excluding funding and trading fees.
You have an initial exposure similar to being long 1.5x leverage ETH, but get longer ETH as ETH goes up and less long ETH as ETH goes down.
3/n
Portugal is a top tier flopping team. They have to spend at least some time during practice to be this good. Wonder if they have an acting coach on the payroll.
For mint+LP you can get up to ~2x leverage on a full range LP by depositing the NFT as collateral, which can make mint+LP more attractive on a return/$ basis.
Minting oSQTH is similar to borrowing oSQTH (and I'd argue that minting a synthetic is isomorphic to borrowing it)
14/n
@WilsonCusack
have you seen the crab strategy?
might be helpful for an idea/implementation of a potential strategy
crab's goal is to have no view on the price of ETH, earn funding and has the view that ETH will move around less than is implied by the squeeth price