Squeeth is a new financial derivative with functions similar to a perpetual swap, tracking the index of ETH² rather than ETH. It provides global options-like exposure (pure convexity, pure gamma) without the need for either strikes or expiries, effectively consolidating much of the options market liquidity into a single ERC20 token. In short, Squeeth makes options perpetual and is a very effective hedge for Uniswap LPs, all ETH/USD options, and anything that has a curved payoff. [1]

In this dashboard I am gonna analyze the TVL in Opyn Squeeth contract (osQETH).

Currently, the osQETH TVL is around 1.3M. 15% of them holded by WETH and the rest for the oSQTH.

Looking at the evolutin over the past 3 months, it can be seen how the trend is so negative. On the one hand the TVL in USD decreased dramatically from around 10M to the current 1.3M. During the past months, the major of deposited value came from WETH but now from sQETH a more volatile token.

In the last chart it can be seen how the amount in tokens decreased for WETH from 2.8k to around 200, while sqETH increased from less than 7k to more than 17k.

Then, to finally respond to the second question about the procedence of the TVL amounts, we can consider what mentioned in the main Squeeqth page. The platform uses Uniswap V3 as the trading layer from which users can buy or sell an ERC-20 token: oSQTH, which roughly tracks the value of eth², on Uniswap. [2]

The mechanism is simple, it uses the traded price on Uniswap to determine the funding rate, so they need people to LP in a wSqueeth/ETH pool to have a fully functional system.

• On the one hand, to long squeeth, users simply buy this ERC20 token from the pool, and when they want to close the position, they sell this ERC-20 back to the pool.

• To short squeeth, users will need to put down collateral, mint oSQTH tokens, and sell them in a Uniswap pool. The position in the vault is represented by an ERC-721: sSQU. To close the position, users will need to buy back oSQTH and burn them to unlock your collateral.