Power Perpetuals
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Last updated
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Real-time compounding, i.e., constantly closing and re-opening positions, is impractical even with today's computing power. Any gap between re-investing circles will definitely generate systematic risks. Fortunately, there's already a practical, equivalent solution that has been put to the test by Opyn Squeeth:
Power Perpetuals are financial derivatives that track index values in the form of xⁿ. After conducting mathematical calculations (refer to our ), we found out that Power Perpetuals can replicate exactly the result of compounding a leverage position.
With the benefits that compounding offers, we believe that using Power Perpetuals to replicate compounding in our protocol will provide a better leverage and risk system for the users & trading pools, further allowing Derion to work more seamlessly and effectively as a Perpetuals AMM DEX.
