ComputeSwap
AMM where you can buy insurance against price falling of a volatile token.
Demo
About
Computeswap is an onchain market focused on GPU compute capacity where providers can hedge against falling rental prices. It is built based on an AMM with a unique custom trading function where liquidity is concentrated within a bound price range. The LP position is then decomposed into the _compute_ token and the _stablecoin_ token. The _compute_ token payoff resembles a butterfly spread (a put option with a cap), we call it Decomposed Compute Position (DCP), that increases in value as the price of the _compute_ token crashes, thereby providing insurance for GPU owners.
How it's made
This project uses Uniswap v4 to create a custom trading function for compute markets. We first initiate liquidity based on the trading function outlined in desmos: https://www.desmos.com/calculator/wmvbxpkkjk With the outlined equation we have the ability to decompose the LP position into the _compute_ weight payoff which resembles a butterfly spread, basically a put option with a cap on how far it can decline. If you as an LP suspect that the price is unlikely to decline by much, you can concentrate the price range rather narrowly and offer more capital efficient insurance than your competitors. This _compute_ weight can now be sold off in a Dutch auction to whoever is interested in a decline in the price of compute such as GPU owners, neoclouds, and data centers. What's worth mentioning here is this entire concept of insurance on a token can be applied to any ERC-20, but we are primarily focus on its mass application for the growing market for compute.