Position Value

Portfolio margin vault of perp and squart

Position Value

vp:=pamountbase+2pamountsquart+amountquotev_p:=p \cdot amount_{base}+2\sqrt{p} \cdot amount_{squart}+amount_{quote}

where amountbaseamount_{base} is the Base token amount, amountsquartamount_{squart} is the Squart amount, amountquoteamount_{quote} is the Quote token amount, and p is the current price of the Base token. If the amount is positive, it is considered an asset, and if negative, it is considered a liability.

Vault Value

The Vault-Value is defined as follows. Margin is the amount of collateral.


Min. Margin

Min. Margin represents the minimum required Vault-Value. To ensure the position value does not become zero even if the price moves by r, the difference between the minimum value of the position within a price movement of +/- r% and the current value is set as the minMargin. Predy defines Min. Margin at the price p as forrow. In the case of the short Squart position, the vpv_p is convex downwards, causing the Min. margin to become zero. To create a buffer, add the value obtained by multiplying the short Squart's value by rdebtr_{debt} to the Min. margin.

minp:=vpMin{vpr,vpr,v(amountbaseamountsquart)2}+Min{0,rdebt(2pamountsquart)}min_p := v_p-Min\{ v_{pr}, v_{\frac{p}{r}}, v_{(\frac{amount_{base}}{amount_{squart}})^2} \}+Min\{0, -r_{debt} \cdot (2\sqrt{p} \cdot amount_{squart})\}

r is risk parameter(e.g. r = 1.02).

rdebtr_{debt} is (e.g. rdebtr_{debt} = 0.001)

Price (amountbaseamountsquart)2(\frac{amount_{base}}{amount_{squart}})^2 is the minimum (or maximum) when considering the position value as a polynomial.

Safe Condition

The condition for a sufficiently safe position can be expressed by the following formula. If this condition is not met, the position will be forcibly liquidated.

Vp>=minpV_p >= min_p

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