Squeeth is a new financial primitive launched by Opyn. It offers the ability to trade an index that tracks the price of ETH squared, and is built on the concept of “power perpetuals.” Like any other perpetual, Squeeth uses an index price and funding rate to ensure the contract trades close to equilibrium at all times. However, Squeeth is a tokenized perpetual that users can buy on Uniswap or by minting oSQTH against ETH.
The utility of such a primitive is wide-ranging. Squeeth can be used as a means of levering up on ETH, hedging options positions, hedging Uniswap V3 LP positions, and as a volatility oracle.
Higher upsides, lower downsides and asymmetric payoffs are Squeeth’s most defining features. Other advantages include no strikes, no expiry and no need to ‘roll’ positions, reducing the cost of gas and removing the loss in spread paid to market makers. Importantly, however, If you are long Squeeth, the normalization factor will reduce your oSQTH value over time. It is therefore important to note that holding Squeeth over extended periods during sideways and bear markets may cause a loss in ETH^2 exposure due to funding rates. Squeeth can be tracked on Opyn’s Squeeth Dashboard.
Read more about Squeeth in this article here.