Opyn launches Squeeth: a leveraged token like perpetual options, so why not use perpetual options?

The oldest options projects in the DeFi field are Hegic and Opyn, and their products are traditional options.

Hegic's option types are relatively simple, only call/put options for ETH and WBTC.

Opyn is relatively rich, not only positions can be minted as ERC20 and then traded on any DEX, but also has launched a series of developer tool kits including tools, templates and utilities, moving towards composability.

The Opyn team announced the launch of perpetual options in August 2021, and now it's finally here - Squeeth.

However, strictly speaking, Squeeth is not a perpetual option, but a leveraged token, but for traders, it can also achieve similar functions as perpetual options and perpetual futures, that is, leveraged positions.

Supporters believe that Squeeth is a major innovation in the field of DeFi derivatives and will be very attractive to traders in the future, so what exactly is Squeeth?



Principle - Leveraged Tokens of ETH²



Squeeth is a smart contract on the ETH index token.

This index is not the common token with several times leverage), but a square - if ETH rises 5 times, then Squeeth's index token oSQTH rises 25 times, and vice versa.

Because index tokens have no expiration date and are also leveraged, buying means going long and selling means going short, which looks similar to perpetual derivatives.

You can mortgage ETH or Uniswap's LP tokens on Squeeth (the mortgage ratio is 200%), mint oSQTH, and then sell it on Uniswap V3, that is, short ETH, and you can also charge the funding rate (if the price rises) ).

You can also buy on Uniswap V3, hold is long. Of course, it can also be destroyed on Squeeth to get the collateral.