SquaredLab BTC²: Leveraged payout without liquidation

Bitcoin traders often encounter the liquidation risk challenge when trading with leverage or Margin. SquaredLab presents an innovative solution: the BTC² Perpetual Index. This revolutionary offering elimiates liquidation risks while ensuring leveraged payouts.

Simplifying BTC² Perpetual Index

BTC² is a unique index that tracks the square of the Bitcoin price. In simple words, if Bitcoin is priced at $100, BTC² will be at $100 x $100 = $10,000. This squared relationship helps traders gain exposure to Bitcoin’s price movements in a different way compared to the conventional trading methods.

The Magic Behind It: No Liquidation

A fascinating aspect of BTC² is how it utilises Zeno’s Dichotomy Paradox to avoid liquidation.

If you’re not familiar with Zeno’s Paradox, think of it like this: Imagine you’re trying to walk to the other side of a room. But instead of walking straight there, you decide to first walk half the distance, then half of what remains, then half of that, and so on. Practically, you keep getting closer but never actually reach the other side because you’re always halving the distance.

Now, let’s apply this to BTC². Imagine your investment as the distance you need to walk across the room. With BTC², even if the market is falling, your losses are halved in a way similar to Zeno’s Paradox. This means you never hit absolute zero; there’s always a fraction left. This ingenious approach gives you the cushion to bounce back if the market turns in your favour later, protecting you from complete liquidation. It’s like the market giving you infinite chances to reach your destination.

Scenario Analysis — Deeper Look

Let’s now dive deeper into various scenarios imagining BTC trading at $ 100 to see how BTC² operates compared to a traditional 2x leverage position.

Index price of BTC² is calculated a below for BTC trading at $ 100,

BTC² = BTC * BTC
100² = 100 * 100

BTC² Index price = 10,000

Scenario 1: Bitcoin goes up 10% to $110

• BTC²: The new value with quadratic exposure will be 110² or 12,100= 21% Increase. Initial value was $100, so the final value is $121.
• 2x Leverage: The 10% increase is doubled to 20%. Initial value was $100, so the final value is $120.

Advantage of BTC²: Slightly higher gains compared to the 2x leverage due to the quadratic exposure.

Scenario 2: Bitcoin goes down 10% to $90

• BTC²: The new value with quadratic exposure will be 90² or 8,100= (-19%) decrease. Initial value was $100, so the final value is $81.
• 2x Leverage: The 10% decrease is doubled to 20%. Initial value was $100, so the final value is $80.

Advantage of BTC²: Slightly lower losses compared to the 2x leverage due to the quadratic exposure.

Scenario 3: Bitcoin goes down 50% to $50

• BTC²: With quadratic exposure, the new value will be 50² or 2,500 = (-75%) decrease. Initial value was $100, so the final value is $25.
• 2x Leverage: The 50% decrease is doubled to 100%. The position is liquidated and the entire initial investment is lost.

Advantage of BTC²: Significant advantage in this scenario. BTC² still retains value and doesn’t face liquidation, whereas the 2x leverage position would be liquidated, losing the entire investment.

Scenario 4: Bitcoin goes up 100% to $200

• BTC²: With quadratic exposure, the new value will be 200² or 40,000 = 300% increase. Initial value was $100, so the final value is $400.
• 2x Leverage: The 100% increase is doubled to 200%. Initial value was $100, so the final value is $300.

Advantage of BTC²: Significantly higher gains compared to the 2x leverage due to the quadratic exposure.

Scenario 5: Bitcoin goes up 200% to $300

• BTC²: With quadratic exposure, the new value will be 300² or 90,000 = 800% increase. Initial value was $100, so the final value is $900.
• 2x Leverage: The 200% increase is doubled to 400%. Initial value was $100, so the final value is $500.

Advantage of BTC²: Extremely higher gains compared to the 2x leverage due to the quadratic exposure.

Conclusion: The Power of Eliminating Liquidation

The BTC² Perpetual Index by SquaredLab brings a revolutionary perspective to Bitcoin trading. By squaring the Bitcoin price, it not only allows for potentially higher gains but also protects traders from the dreaded liquidation. It empowers traders to stay invested even through the harshest market conditions and benefit from eventual recoveries. This innovation marks a new era of trading, with minimised risks and enhanced possibilities.

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