Stop worrying about cryptocurrency volatility, you can profit from volatility.
Written by: Viktor DeFi
Compilation: Deep Tide TechFlow
Finally, stop worrying about the volatility of cryptocurrencies. Instead, you can now bet on this volatility to maximize your gains, or even earn handsome profits from other people betting on it.
This post tells you how to take advantage of CVI - a new DeFi primitive.
Built on Ethereum, Polygon and Arbitrum, CVI is a decentralized cryptocurrency VIX that enables users to hedge against volatility in the crypto market.
Essentially, CVI is bringing a "Market Fear Index" to the cryptocurrency industry, with the aim of enabling users to:
- Analyze the volatility of cryptocurrencies
- hedge their portfolio
- Earn money as a Liquidity Provider
CVI is jointly established by COTI Network and VIX founder Professor Dan Galai.
How does it work?
The platform tracks the 30-day implied volatility of Bitcoin and Ethereum on a scale between 0 and 200. It uses the Black-Scholes option pricing model to calculate the implied volatility (Bearish/ Bullish) of cryptocurrency option prices.
The platform aggregates off-chain data and contracts from multiple data providers through Chainlink nodes. Additionally, CVI utilizes Deribit as one of its primary data computing sources.
betting on volatility
Volatility trading is one of the main ways to earn income with CVI. The platform's token is $CVOL, which can be minted on the DEX.
Traders can mint or burn $CVOL after a delay of approximately 20-60 minutes.
The funding fee is calculated based on the hourly CVI index. This means that the higher the CVI value, the lower the percentage of fees. These funding fees are paid by traders who mint volatile tokens.
THETA Vault
Launched in November 2022, THETA Vault aims to provide CVI tokens with a sustainable source of Liquidity. Here, users can deposit USDC and earn benefits from swap fees, arbitrage fees, minting fees, trader's profit and loss, and funding fees.
Token Economics
$GOVI is the governance token of the CVI platform. The total supply of the token is 32 million, of which the initial supply is AirDrop to COTI native holders on Uniswap and LPs of the COTI- ETH pool.
Importantly, 85% of platform fees will be used to buy back $GOVI tokens from the market. Finally, tokens will be distributed as staking rewards to CVI traders, LPs and $GOVI stakers.
It’s worth noting that $GOVI has performed well among low-cap tokens lately, and with no signs of slowing down right now, the future looks bright for CVI.
