✨ Gamma Cheatsheet ✨

Borrowing

Market Outlook	High Volatility
Timeframe	A few days up to a few months
Strategies	Straddle, Long and Short
Straddle	Profits if the price increases in either direction. There is less leverage in small price movements and more liquidity borrowed than a long or short. The cost to maintain the position should be the same as a long or short, however, since the borrow APR is the same. In large price movements, 50%-100%+, the straddle has more leverage than directional positions - Long and Short.
Long & Short	Longs and Shorts profit if the price increases or decreases, respectively. It has more leverage in smaller price movements (3%-50%) but will lose money if the price moves to the opposite direction of the trade position. If the prices moves far enough against the trader, the trader may actually profit. Think of these positions as "protected" perpetuals.
Capital Efficiency	In a straddle, you can get 30-100x the notional size of your deposit. In a long or short, you can get 10-33x your deposit size. GammaSwap V1 does not utilize concentrated liquidity and instead relies on full range UniV2 style AMMs utilizing the x*y=k liquidity invariant. This means all positions are fully collateralized (no virtual liquidity).
Costs	Slippage, when opening a Long or Short, since the collateral has to be rebalanced to the more volatile asset or more stable asset respectively. Origination fees if utilization is high. Borrow fees which must be paid to hold the position. Reflected in your theta cost as a dollar and percentage. Rebalancing Fees for opening a Long or Short
Liquidations	Liquidations are not based on price but rather based on time. You will never be liquidated in GammaSwap if there is a huge price wick. There is a time to liquidation based on the borrow rate and current LTV of the position.

Providing Liquidity

Market Outlook	Low Volatility
Timeframe	Long Term
Yield Source	Native Yields if using a LRT token or another yield bearing token Interest rate paid by borrowers Opening fees paid by borrowers when utilization is high Swap fees (depending on AMM & available liquidity)
Risks	Impermanent Loss, same as UniV2 which you can calculate here https://dailydefi.org/tools/impermanent-loss-calculator/ Lack of liquidity to support withdrawals if utilization of the pool is high. This is a similar risk to lending markets like Aave. Smart Contract Risk - a risk when using any DeFi app. GammaSwap has been audited multiple times and has never been exploited.
Composable?	Yes, every LP receives ERC-20 GSLP tokens representing their positions. These tokens can be used to stake or offered as collateral in other platforms.