Fuli Yang
Published 30 October 2026 · Version 1.0 · pp. 1-16
Abstract
A futures contract has a legal maturity, but it can lose economic relevance before that date. This paper develops the concept of contract half-life for derivatives written on rapidly evolving technological vintages. Contract half-life is the time required for a hardware-specific contract's economic relevance - measured through commercial exposure, trading liquidity, and price-discovery importance - to fall to one-half of its reference level. The distinction matters for compute derivatives because the announced H100 and B200 futures are tied to named GPU generations whose commercial importance can migrate faster than their rental prices disappear. A simple vintage-migration model separates rental-price depreciation from benchmark-relevance depreciation and shows how innovation intensity, maturity, and liquidity network effects jointly determine economic expiry. The model yields four testable propositions: activity should migrate to a new vintage faster than the old rental index declines; distant maturities of an old-vintage contract should lose viability first; faster innovation should shorten contract half-life; and rolling or performance-adjusted benchmarks should extend durability while increasing conversion-model and governance risk. The paper proposes observable half-life measures based on open interest, volume, information shares, and commercial benchmark adoption, and explains why a still-published settlement index is insufficient evidence that a contract remains economically alive. Because these propositions require post-launch data, the paper also uses three completed benchmark transitions - the shift of a gasoline contract to an RBOB basis, the ultra-low-sulfur respecification of heating oil, and the inclusion of WTI Midland in Dated Brent - plus unsuccessful DRAM-futures proposals as identification templates. These analogues distinguish benchmark replacement, internal respecification, constituent revision, and launch failure; they are not estimates or formal bounds on compute-contract half-life.
Cite this article
Fuli Yang (2026). The Half-Life of a Futures Contract: Technological Obsolescence and Vintage Risk in Compute Derivatives. GARCH, 1(1), 1-16.
Versions and rights
This is the GARCH journal edition. The manuscript retains its original research-version date. Earlier working paper: SSRN 7359042.
Copyright © 2026 Fuli Yang. All rights reserved. Full text is freely available to read and download.