Potentia

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Potentia Features ​

1. No Liquidations ​

Users gain access to leveraged exposure without the risk of liquidation. ​​Potentia maintains value even during extreme market volatility.

  • Longs have 0 value only if the underlying asset price is 0
  • Shorts have 0 value only if the underlying asset price is infinity

If the price reverts from 0 or infinity, tokens representing the position will have a positive value, therefore, the positions are not liquidated.

2. Amplified Gains & Softened Losses ​

Potentia exhibits positive convexity, meaning favourable price movements yield greater positive returns compared to the absolute negative returns from equally sized unfavourable moves.

Let' compare the risk-return profile of 5x leverage with BTC5, a power derivative on Genie DEX:

Scenario 1: The Price of BTC Increases by 20% ​

  • 5x Leverage: 100% profit
  • BTC5: approx 148% profit

Scenario 2: The Price of BTC Decreases by 20% ​

  • 5x Leverage: 100% loss (leading to liquidation)
  • BTC5: approx 67% loss

To conclude,

  • A 20% increase in the underlying asset price (BTC) results in a 148% return
  • A 20% decrease in the underlying asset price (BTC) results in a 67% loss

3. No Strikes or Expirations ​

Crypto options markets are often fragmented across multiple strike prices and expiration dates, leading to inefficient capital utilisation.

Potentia addresses this issue by providing continuous exposure without an expiration date. No strikes or expirations help consolidate liquidity from the fragmented options market into a single, efficient instrument.

4. Create low cost power pools ​

Potentia enable liquidity providers to create and manage power perpetual liquidity pools in a permissionless environment.

Users can create low-cost pools in under a minute on Genie DEX by paying an activation fee in SQL tokens and locking up a minimum quantity of SQL tokens.

5. Trade power pools ​

Users can trade existing power pools on Genie DEX. These pools can be either:

  • Simple Pool: These are pools with a single power perpetual asset for eg. BTC2.
  • Composite Pools: Offers a variety of convexity options of multiple powers within a single pool for eg. BTC2, BTC3.

6. No Impermanent Loss for LPs ​

Simple pools and composite pools help Liquidity Providers avoid impermanent loss (the loss associated with providing liquidity).

LPs are required to deposit only a single asset in the LP pool instead of a pair of assets, which helps LPs allocate capital efficiently while avoiding impermanent loss.