Opyn SqueethPrice

(OSQTH)

Opyn Squeeth, or oSQTH, was an ERC-20 token designed to track the squared price movements of Ethereum (ETH), effectively representing a "squared ETH" (ETH²) position. Introduced by Opyn, it was built as a new financial primitive based on "power perpetuals," offering unique exposure to the Ethereum market through an innovative derivatives structure.

Squeeth functioned as a perpetual options protocol, enabling users to trade an index that followed ETH's squared price. Unlike traditional options with fixed strike prices and expiry dates, Squeeth operated as a continuous "rolling contract" without such limitations. It utilized an index price and a funding rate to maintain market equilibrium. Users could acquire oSQTH on decentralized exchanges or by minting it directly against ETH, providing flexibility in access.

A key feature of Squeeth was its ability to provide leveraged exposure to ETH without the typical liquidation risk associated with traditional leveraged positions for long holders. This offered the potential for significant upside gains while protecting against downside losses. Additionally, it eliminated the complexities of strike prices, expiry dates, and rolling positions, which could also help reduce associated transaction fees on the network.

The funding rate was a critical mechanism within Squeeth. Typically, long oSQTH holders paid a funding premium to those providing short oSQTH positions. While this rate helped ensure the contract traded closely to the underlying ETH² price, it also meant that holding oSQTH for extended periods, especially during sideways or bear markets, could lead to a continuous erosion of its value. This effect was comparable to time decay observed in traditional options.

While long oSQTH positions offered protection from liquidation, the funding rate represented a significant consideration. This rate continuously eroded the value of a long position over time, particularly in stable or declining market conditions, acting as a persistent drag. Additionally, high transaction fees on the Ethereum network were identified as a potential concern for users engaging in short-term trading strategies with oSQTH.

Opyn Squeeth officially ceased operations on November 4, 2024, with all outstanding positions settled at that time. Users are now able to redeem ETH equivalent to the value of their positions from oSQTH and related products. The Opyn team has announced a transition to "Opyn Markets," indicating plans for new, permissionless opportunities for similar perpetual products, suggesting an evolution rather than a complete discontinuation of their innovative approach.