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Launching Inverse ETH FLI

Christoph - Feb 11, 2022 | 2 minutes read

After launching both the 2x and inverse Flexible Leverage Indices (FLIs) tracking MATIC earlier this week, Scalara now launches the Inverse ETH FLI on Polygon.

The Inverse ETH Flexible Leverage Index, or short iETH-FLI-P, is an index that implements a collateralized debt position to replicate -1x the return of ETH. Its launch completes the ETH FLI suite on Polygon after the ETH2X-FLI-P launch in December 2021. More information about inverse FLIs are available in our article about launching MATIC FLIs on Polygon.

Flexible Leverage Indices implement a collateralized debt position in a controlled and efficient way to achieve leveraged or inverse returns and, by abstracting its management into a simple index, make it investable as a single ERC20 token. Thereby, implementation costs are socialized and the continuous effort to maintain a healthy debt position is automated away. In addition, a unique algorithm helps to lower the transaction fees.

Furthermore, Flexible Leverage Indices being implemented on Polygon means that entering and exiting a leveraged position is possible for a fraction of the cost that one would normally pay on Ethereum’s Mainnet.

Below the hypothetical index performance over the last three months is shown:

Source: Simulated with Scalara and hourly Coingecko data. Log-scale has been applied to make vertical distance comparable.

Index Parameters

Underlying assetUSDC
Target leverage2 (-1 exposure)
Maximum leverage ratio2.2 (-1.2 exposure)
Minimum leverage ratio1.8 (-0.8 exposure)
Epoch length4 hours
Recentering speed2.5%

You can read more about Flexible Leverage Indices at scalara.xyz or find out more about the iETH-FLI-P and ETH2X-FLI-P tokens at the Index Coop or Set.

Scalara is dedicated to creating and maintaining indices for a decentralized world.

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