New use cases

Infinite structured products

Liquidity providers on InfinityPools can structure their liquidity positions in such a way that their payoffs match those of more traditional structured products such as covered calls or cash secured puts. The advantages of providing capital to an InfinityPools structured product rather than one constructed via traditional options are:

  • Any asset: They are available for all assets, including those with no existing perp, options or spot markets.

  • Any payoff: Permissionless and flexible payoff structures with the option to withdraw capital exponentially at any time.

  • No fees: No fee is paid to market makers for rolling over positions.

More powerful flash loans

Flash loans currently offer a leverage ratio of 1111x (corresponding to a one time interest payment of 0.09%) but only last a single transaction (essentially for zero time). Swappers are more powerful for two reasons:

  • More time: a swapper can offer 1000x leverage over multiple blocks instead of a single transaction.

  • Returned tokens: A swapper’s reserve tokens returned can be any mixture of the pool’s two tokens, so long as they are interchanged in the proportion given by the strike price.

Multi-block arbitrage

With InfinityPools, arbitrageurs are able to borrow large amounts of assets for multiple blocks. This means they can execute arbitrages between DEXs with two legs separated in time (as is typically the case in off-chain arbitraging across exchanges), rather than being limited to buying and selling simultaneously in a single transaction with a flash loan. Such leveraged market making across DEXs outside the confines of a single block is also advantageous as these trades are much harder for miners to steal for themselves (significantly reduces MEV). Here is an example breakdown:

  • Take out loan of ETH, for a strike close to the market price

    • Swap ETH for USDC on DEX A

    • Later: Swap USDC for ETH of DEX B (can even have DEX A = DEX B at a better price than in previous step)

    • Return the loan

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