Margined is excited to be deploying its power perps to Osmosis
What are power perps?
Power perps are a type of everlasting option that give user’s exposure to the underlying squared. So for our first asset,
osmo, user’s can go long on the exposure of
sqosmo for short).
If you need more details see here.
Why do I care about
sqosmo? There are perps with more leverage!
This is true - but user’s can go long
sqosmo without the risk of liquidation. Further should the value of
osmo decrease the losses are also reduced.
What’s the catch? Well shorts are paid a funding rate that is slightly larger than a tradition perpetual, but still no risk of liquidation, eh!
Sure, I can go long but what else?
Well another key innovation of Margined’s Power Perps is that they are completely integrated to Osmosis’ concentrated liquidity pools. This means that the price of
sqosmo is found on-chain.
Not to labour the point, but on-chain price discovery is a key part of making DeFi functional as we can create derivatives without the need for external price oracles. Derivatives are a key part of financial markets it’s a core component for making DeFi a true competitor for TradFi markets.
Further, whilst oracles are an important part of the current state of DeFi markets they can always be corrupted or interrupted in some way. Thus on-chain price discovery, in place of external, allows us to build better products!
Also where the price of an asset is set is very important. If you need any proof look at the ability of the LME (London Metal Exchange) to maintain dominance in the price setting of metals despite the UK not being a producer of most metals…
Tl;dr prices are very important.
How can I use power perps I am a smooth brained degen who hates math
Dear degen, don’t worry Margined has a plan!
In addition to the deployment of power perps for assets such as osmo, atom and wBTC we will also be deploying strategy vaults on top.
Our strategies will enable user’s to gain exposure to price movements without needing to manage the positions themselves (well duh that’s what strategies are).
The first of which will be a crab strategy that will perform well in low volatility sideways market.
But there are many more strategies and interesting hedging things to come. Including,
- hedging for LP positions
- bull strategies
- bear strategies
Ok I made it to the end what’s my reward?
Well thanks for reaching the end of this blog post. We hope you are now excited by the possibilities of on-chain price discovery and what it means for DeFi!