Introduction

Squared ETH or Squeeth is a perpetual options protocol that provides unlimited upside leverage with no liquidations on long positions. Squeeth isn't just a tool for traders, it can be used as a hedge for liquidity providers on Uniswap and it can provide a funding rate yield in sideways markets.

Users can either buy oSQTH from the Uniswap LP, or by depositing eth and purchasing it from the contract. When users want to close their position, they can either burn the oSQTH and withdraw their funds, or sell it back to the Uniswap LP.

Method

• Analyze ETH deposits and withdrawals.
• Analyze the total ETH available on the Controller contract over time.

Minting or Burning?

When a user deposits ETH to the Controller contract (https://etherscan.io/address/0x64187ae08781b09368e6253f9e94951243a493d5), they are then able to mint oSQTH. Conversely, when the user burns their oSQTH, they are able to withdraw the amount of ETH that it was worth.

This chart shows the amount of ETH deposits vs the ETH withdrawals from the contract. There are some obvious spikes, for example on March 15th, where there were lots of deposits and lots of withdrawls. In general, there appear to be more withdrawals than deposits into the contract, which most likely means more people are buying oSQTH via the Uniswap LP and closing their positions via the contract.

Contract Balance

Conclusion

oSQTH is a very interesting token which uses unique methods to maintain pricing and balance. The value of oSQTH is drawn from the amount of ETH deposited into the contract, as well as fluctuates based on the amount of ETH withdrawn from it.