Updates on the Squeeth Ecosystem

Squeeth is a power perpetual developed by Opyn indexed to the price of ETH raised to the second power. For a detailed look at power perpetuals, see this review. In short, power perpetuals use higher-order index prices to create convex payoff structures.

For traders, convexity creates payoff structures with accelerating profit for favorable price movements (this is called being long gamma). This asymmetry has an associated cost where traders who are long gamma pay premiums to positions on the other side of the trade in exchange for the convex payoff.  At the lowest level, Squeeth offers traders convexity in the simplest form through a simple convex payoff structure that shares similarities with options contracts.