Vault Design
Points:
Oracle Free Perpetual Option Protocol
The exchange of tokens relies on Uniswap
Applicable to all token pairs in Uniswap
\begin{align*} [Predy_{v3 Core}]\\ OptionVault_{value} &= Asset - Debt + Margin&\\ &= f_2(x_a,y_a,LPT_{asset}) - f_2(x_d,y_d,LPT_{debt})&\\ &= f_2(x_a,y_a, f_1(x,y)) - f_2(x_{d},y_d,f_1(x,y))&\\ &where, LPT_{value} = f_1{(x, y)} \ inherited \ from \ Uniswap &\\ &Example: x = ETH, y = USDC, \sqrt{P} = \sqrt{\frac{y}{x}} &\\ f_2(x_a,y_a, f_1(x,y)) &= (x_a + L *\frac{\sqrt{P_b} - \sqrt{P_{twap}}}{\sqrt{P_{twap}}\sqrt{P_b} }) * P_{twap} + y_a + L*(\sqrt{P_{twap}} - \sqrt{P_b})&\\ f_2(x_d,y_d, f_1(x,y)) &= (x_d + L *\frac{\sqrt{P_b} - \sqrt{P_{twap}}}{\sqrt{P_{twap}}\sqrt{P_b} }) * P_{twap} + y_d + L*(\sqrt{P_{twap}} - \sqrt{P_b})&\\ &where, L = \sqrt{xy}, P_a =1.0001^{lowerTick} , P_b=1.0001^{upperTick} , P_a < P < P_b &\\ \end{align*}
Smart contracts manage by performing three main operations.
Exchange of and
Management
Management
has to pay/earn Premium with the management as follows:
Mint and Burn of , Lending and borrowing of
Deposits and withdrawals of or
Lending and borrowing of or
Predy v3 defines as follows, allowing Option positions to be taken in the Vault.
Note:
In smart contracts, each option is corresponding to a SubVault.
Daily Premium payments are made in Margin and are not compounded.
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