Historical Funding Rates: A Study, with Implications for UXD’s Insurance Fund

Results-

Historical Data

Fixed Start Date

  • A 100% SOLPERP backed UXD receiving 100% of the funding rate would have resulted in the insurance fund growing from $57mm to over $180mm in one year’s time.
  • A 100% XBTUSD backed UXD receiving 100% of the funding rate would have resulted in the insurance fund growing from $57mm to over $115mm in one year’s time.
  • Note this results in a very conservative estimate: since funding payments are computed as the funding rate times the price of the underlying asset, and because positive (negative) funding rates are generally associated with rising (falling) prices, a constant price assumption understates the size of positive funding payments, and overstates the size of negative funding payments.

Varied Start Dates

Effects of UXD Supply Caps

Effects of Insurance Fund Asset Management Returns

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UXD Protocol

UXD Protocol

Algorithmic stablecoin backed 100% by a delta neutral position using derivatives.