FlatPerp enables retail traders to mint and short Squeeth via an ERC-4646 vault. Users make money when ETH stays flat or goes does, via a funding rate and delta-negative price exposure.
FlatPerp is a suite of ERC-4626 token vaults enabling retail traders to mindlessly trade power perpetuals, similar to how Ribbon makes options trading more accessible. Our first vault, FlatStrat, democratizes shorting of Squeeth (squared Ethereum) and collecting funding rates. As the name implies, FlatStrat makes money when ETH stays flat or drops in price. Currently, users have to deposit at least 6.9 ETH to mint Squeeth via Opyn’s smart contracts or front-end. They subsequently sell their Squeeth for ETH (or another asset) and continuously monitor their collateral ratio of ETH:Squeeth; if this ever falls below 150%, users can be liquidated. FlatPerp FlatStrat enables users to simply deposit ETH, not worry about minting Squeeth, exchanging Squeeth to ETH, and monitoring their collateral ratio. They also pay lower gas fees, as the costs are distributed amongst many users. We’re excited for the future of power perpetuals, as they provide users with unlimited upside, protected downside, and pure convexity. We believe the market will grow to appreciate power perps as much as we do, and FlatPerp is here to bridge the gap for retail users in pure DeFi fashion.
How it's made
FlatPerp is an ERC-4626 vault that’s built on top of an existing derivative called a power perpetual, specifically Squeeth (squared Ethereum). An ERC-4626 is an extension of the fungible ERC-20, invented by Tribe DAO. It creates a standardized token representation for interest-bearing assets that users receive as a “receipt” of their position in a vault. This is beyond helpful in creating a starting point for interest-bearing assets as well as ensuring our vaults are easily composable with other DeFi applications in the future. FlatPerp currently has 1 smart contract: FlatStrat. 1. FlatStrat takes in ETH from users, uses it as collateral to mint Squeeth, swaps Squeeth for wETH via the Uniswap v3 router. 2. When users want to withdraw, FlatStrat does the reverse: it swaps wETH for Squeeth, burns Squeeth and receive back ETH as collateral, then gives back the ETH to users. The front-end is focused on these Deposit & Withdraw functions. It utilizes ethers.js to interact with the smart contract and React for general-purpose front-end development. The designs were made in Figma :)