Articles
Option Series Part IV - Economic Incentives for LPs
• Pablo Bartol • 17 min readThis article analyzes liquidity, trading volume, capital efficiency, tokenomics, fees, and structured product performance and more.
Exploring the DeFi Perpetual Futures Landscape - Part I
• Pablo Bartol • 18 min readDeFi Perpetuals Landscape 2023
Arithmetization in STARKs Series Part III - Degree Bounds and Computational Complexity
• João Farinha & Tiago Martins • 11 min readThis report compares the low-degree bounds of AIR and PAIR, specifically with proximity testing in mind.
Insurance Series Part III - Unwrapping Different Claim Assessment Types
• Catarina Urgueira • 13 min readThis report deconstructs the existing claim assessment processes used in the DeFi Insurance space.
Arithmetization in STARKs Series Part II - Preprocessed AIR
• João Farinha & Tiago Martins • 12 min readIn Part II of our Series on Arithmetization Methods for STARKs, we describe the construction of PAIR in the general case of multiple disjoint constraints.
Insurance Series Part II - Exploring Premium Pricing and Risk Models for Insurance
• Catarina Urgueira • 20 min readThis article looks at the inner workings of the pricing models and risk used by the different protocols.
Arithmetization in STARKs Series Part I - An Introduction to AIR
• João Farinha & Tiago Martins • 12 min readArithmetization of computational integrity statements into polynomial constraints with known degree bounds, for use in STARKs with low-degree proximity testing.
Insurance Series Part I - An Introduction to DeFi Insurance
• Catarina Urgueira • 20 min readThis report provides a historical overview of the DeFi Insurance space, compares the sources for underwriting capital, and explores the existing cover types.
Deriving Impermanent Loss Formula in Balancer
• Rúben do Reis • 14 min readDecentralized exchanges, specifically automated market makers (AMMs), play a crucial role in the DeFi ecosystem.
Volatility Series Part II - Applying GARCH Models to Crypto Assets
• Carolina Goldstein & Joana Gomes • 14 min readIn the first part of our article, we explored the nature of volatility and its importance in the context of cryptocurrency markets. We also emphasized the
Volatility Series Part I - Modeling Volatility in Crypto Assets
• Carolina Goldstein & Joana Gomes • 16 min readThe crypto market has been subject to significant turbulence, as evidenced by events like the market crash in May 2021, which caused its market cap to drop
Neferpitou: Three Sigma’s Agent-Based Simulation Framework
• Carolina Goldstein & Andreia Pereira • 10 min readDiving into the world of agent-based modeling since early 2022, we at Three Sigma have been working to address a crucial gap in the blockchain industry.
Option Series Part III - Navigating Through Options Collateralization
• Pablo Bartol • 16 min readIn this third article we will look at option collateralization, specifically the margin and liquidation engines of the protocols that allow leverage option
On Tokenomics Series Part II - The Game of Supply and Demand: The Demand
• Carolina Goldstein & Joana Gomes • 12 min readThis is the second part of a two-part blog post about how supply and demand affect token design. The first part explained how to match the project's goals
Options Series Part II - Exploring Different Pricing Approaches and Tokenomics
• Pablo Bartol • 15 min readThis second article will look at the inner workings of pricing, especially the violations of the Black-Scholes Model (BSM), which is the most commonly used
On Tokenomics Series Part I - The Game of Supply and Demand: The Supply
• Carolina Goldstein & Joana Gomes • 14 min readTokenomics, or the study of how tokens are created, distributed, and used within blockchain protocols, is a crucial aspect of the cryptocurrency and blockchain
Options Series Part I - An Overview of the DeFi Options Landscape
• Pablo Bartol • 20 min readDeFi Options have become a highly sought-after product. However, compared to centralized counterparties, DeFi remains a small
Challenging Periods Reimagined Part II - The Key Role of Sequencer Decentralization
• Daniel Fonseca & André Pereira • 20 min readChallenging Periods Reimagined Series: Part II proposes decentralized sequencers with adjusted governance and incentives for improved Optimistic Rollups.
Distributed Automated Market Makers (dAMMs)
• Tiago Fernandes • 15 min readCapital efficiency has become a major concern for L2 solutions as DeFi continues to grow since liquidity is divided between L1 and multiple L2s.
The SVB Collapse: A Wake Up Call for Better Risk Management
• Carolina Goldstein & Joana Gomes • 5 min readCircle, the company behind the USDC stablecoin, acknowledged on Friday to having a $3.3 billion exposure to the now collapsed Silicon Valley Bank (SVB).
Challenging Periods Reimagined Series Part I - Road to a Dynamic Challenging Period
• Daniel Fonseca & André Pereira • 25 min readThis article proposes a dynamic model for optimistic rollups' challenging period, having a minimum of 23h to minimize risks.
Investment Thesis: Arrakis Finance
• Pablo Bartol • 12 min readArrakis acts as a decentralized market-maker where users have their liquidity managed through Arrakis, and projects can create deep liquidity for their native
Working with Three Sigma: A Q&A with the Yeti Finance Team
• Pedro Santos & Carolina Goldstein • 5 min readYeti Finance was one of the first projects Three Sigma worked with, and we are very fond of the long-term partnership that developed over the duration of the
The Hitchhiker's Guide to DeFi Insurance
• Carolina Goldstein & Catarina Urgueira & Tomás Thor Palmeirim • 120 min readSince the early days, the DeFi market has been severely shaken by hacks, bugs, exploits, rug-pulls, flash loan attacks, and a long list of attack vectors,
Investment Thesis: Insrt Finance
• Tomás Thor Palmeirim • 7 min readInsrt Finance is building a layer of simplification and abstraction for NFT finance, aggregating yield-generating strategies into Yearn-like user accessible
Introducing: Three Sigma
• Afonso Oliveira & Tiago Barbosa & Eduardo Morgado • 6 min readThe crypto/web3 industry has demonstrated how much it benefits from technical expertise and how far it still is from reaching its full potential.