everyone built on Uni v3
no one solved its biggest flaw
Gamma just did
this is the first real hedge for concentrated liquidity
gETH gives you
- delta-neutral ETH exposure
- 15â25% APR
- no IL
- fully automated
- fully composable
- fully onchain
under the hood:
- uni v3 LP (±50% range)
- perp long ETH
- short v2 LP to cancel out IL
holy moly that is clean, scalable and finally makes v3 yields dependable
USDC version next...perp short ETH, same idea, different market view
Gamma is what every LP has been waiting and it will change DeFi forever
linn is ambassador for @gammaswaplabs
A short infographic visualizing how the gETH yield token functions:
1ïžâŁ A concentrated liquidity position is created in Uniswap V3 in a 50:50 ratio in ETH/USDC in the +-50% range (initial parameters).
2ïžâŁ As the price decreases, more of the LP is rebalanced to ETH. As the price increases, more of the LP is rebalanced to USDC.
3ïžâŁ A GammaSwap long is opened in the ETH/USDC pool to replicate this rebalancing in the opposite exposure. The net exposure is delta neutral in ETH terms.
4ïžâŁ If the LP approaches the end of the range (+-30%), the position will be rebalanced. This will incur some slippage and other costs reflected in a small drawdown.
Other key things to note about the strategy are that the LP position collateralizes the hedge position increasing capital efficiency. The strategy is whitelisted not to pay borrow fees and instead shares fees with the GammaPool. This means the yield will be never be negative.
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