So you have basically created a straddle (technically a perpetual straddle - one important difference between liquidity pools and options is that there is no term structure in liquidity pools)
This is a good way of looking at it. If you deposit e.g. $1m ETH and $1m USDT in an ETH/USDT pool and then short $1m of ETH perpetual swaps you are delta neutral, lose if the px goes up or down, and collect on pool fees and swap funding rate (assuming funding rate is positive)
-
-
-
Simplest liquidity pools are constant product - the total reserves x, y of the two coins always satisfy xy=k where k is a constant. Also the price p=y/x so you have x=sqrt(kp) and y=sqrt(k/p), and total value of the pool is x+yp = 2 * sqrt(kp)
- Show replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.