Hypersea
  • Math and Research
    • 📈Logarithms in Finances
      • ▫️New Logarithmic Units for Financial Applications
    • 🍋Concentrated Liquidity
    • ♎Omega-Transforms
    • 🧊Basis and Coordinate Systems
    • ✂️Conservation of Arbitrage Momentum
    • 🔢Quantitative Model of Liquidity Concentration
    • ⚡Simulation and Backtesting
    • 🚴Comparison with Competitor Platforms
    • Dynamic Characteristics of Trading Flow
  • Policies
    • Terms of Service
    • Privacy Policy
    • Protocol Disclaimer
    • Cookie Policy
  • Misc
    • 🪜Docs-In-Progress
      • 🔎Introduction to Hypersea
        • ▫️What is Hypersea?
        • ▫️What makes Hypersea unique?
        • ▫️What is HYPS token
      • ⚖️Liquidity Management
        • 🔹Basics of liquidity management in Hypersea
        • 🔹Unique liquidity management mechanism
        • 🔹Advantages of Hypersea's liquidity management mechanism
      • 🍨Externally Provided Liquidity (XPL)
        • 🔹What is XPL?
        • 🔹How does XPL work in Hypersea?
        • 🔹The role of XPL in the liquidity management mechanism of Hypersea
      • 💰Protocol Active Treasury (PAT)
        • 🔹What is PAT?
        • 🔹How is the PAT used in Hypersea?
        • 🔹The role of the PAT in the liquidity management mechanism of Hypersea
      • 🚀Liquidity Boosting
        • 🔹How PAT boosts XPL liquidity
        • 🔹The complementary nature of PAT and XPL
        • 🔹Advantages of the PAT and XPL combination in Hypersea
      • 🧑‍⚖️Hypersea DAO
        • 🔹What is DAO?
        • 🔹Governance Levels in Hypersea DAO
        • 🔹How does the DAO ensure the management and development of the protocol?
      • 🌿Continuous Coin Offering (CCO)
        • 🔹What is CCO?
        • 🔹How does CCO work in Hypersea?
        • 🔹Advantages of CCO in Hypersea
        • 🔹The role of CCO in the stabilization mechanism of the HYPS token
Powered by GitBook
On this page

Was this helpful?

  1. Math and Research

Conservation of Arbitrage Momentum

We explain the principle of conservation of arbitrage momentum, a concept that underlies Hypersea's unique liquidity management mechanism. We define the arbitrage momentum as the difference between the implied and realized volatilities of a trading pair, and explain how it can be used to estimate the optimal liquidity allocation across different pools.

We demonstrate how the conservation of arbitrage momentum allows Hypersea to effectively use and not lose the information that users contribute to the system through their trades. We discuss the advantages of this approach compared to other liquidity management strategies, and provide examples of how it can improve the overall performance and stability of the platform.

PreviousBasis and Coordinate SystemsNextQuantitative Model of Liquidity Concentration

Last updated 2 years ago

Was this helpful?

✂️