What is CVI (GOVI)?
CVI is the first of its kind, decentralized VIX for the crypto market so that traders can hedge themselves against volatility. CVI is a full-scale decentralized platform that brings the sophisticated and very popular “market fear index” to the crypto market. It is created by computing a decentralized volatility index from cryptocurrency option prices, together with analyzing the market’s expectation of future volatility.
CVI provides the most reliable DeFi tool suitable for analyzing volatility, hedging portfolios, and earning from being a liquidity provider. It is an innovative, decentralized, stable, transparent, informative, and replicable benchmark for cryptocurrency volatility information. CVI was created by the COTI team that partnered with Prof. Dan Galai, the creator of the original VIX, to create a “market fear index” for the crypto market.
By computing a decentralized volatility index (CVI) from cryptocurrency option prices, the new system analyzes the market’s expectation of future volatility. COTI’s method addresses the challenging liquidity environment of this evolving asset class and allows us to extract the needed data to evaluate implied volatilities.
CVI Ecosystem Overview
For CVI to be popular and widely adopted, there should be an instrument (system) allowing traders to easily open positions against the index and trade it. Therefore, as part of the CVI launch, COTI will also introduce an innovative and full-scale decentralized ecosystem that includes the CVI trading platform, volatility tokens, and the $GOVI token. The CVI ecosystem is formed by the following components:
The CVI Platform allows users to trade the CVI index, provide liquidity to get trading fees, and stake both the LP tokens they get from providing liquidity and the GOVI token for additional rewards.
By buying and selling Volatility Tokens, traders can easily trade volatility on DEXs and even CEXs, making the Crypto Volatility Index (CVI) much more composable and accessible to the greater DeFi ecosystem.
85% of the platform-generated fees will be collected and used to buy GOVI tokens on the market, reducing the token supply in the open market. The remaining token supply will be distributed to the CVI ecosystem members, such as CVI traders, liquidity providers, and GOVI stakers, in the form of open positions and staking rewards.
The “GOVI” token is an ERC-20 token and acts as the governance token for the protocol and the platform. The total supply of $GOVI is capped at 32 million tokens, with no option to mint more. The initial supply was airdropped to COTI native holders and liquidity providers of COTI-ETH pools on Uniswap. After the airdrop, the distribution of $GOVI was set according to the model below:
$GOVI holders as part of this ecosystem will be able to:
- Receive a share of the platform’s collected fees.
- Vote on trading platform changes and enhancements.
- Vote on changes to the data source and aggregation protocol.
- Vote to change Dmin (liquidation position deposit minimum level).
- Vote to change D0 (opening position deposit size).
- Vote to change the fees.
- Vote to change leverage.
Who are the founders of CVI (GOVI)?
The founder of CVI is Dan Galai. He attended the Hebrew University of Jerusalem and the University of Chicago Booth School of Business.
What is CVI (GOVI) used for?
CVI isniser for trading. If volatility increases, you make a profit regardless of the price change. Traders can use the CVI to hedge their cryptocurrency holdings against volatility. For example, a trader may have a long position in a portfolio of various top currencies and fear adverse market conditions.
Liquidity providers can earn a share of all trading transaction fees by providing liquidity to the platform. Liquidity providers are an essential part of the CVI ecosystem. This means that if a trader has entered a position on CVI and lost that trade, the liquidity providers are the ones to recoup the lost trade, and vice versa.
Gain governance rights and platform fees from all supported chains within a few clicks. Staking of the $GOVI tokens is currently available on Polygon and Arbitrum.
Maximize revenues from your trading strategies by profiting from any deviation between the volatility tokens traded in DEX/AMMs and the CVI Platform.
How is CVI (GOVI) unique?
Trading the CVI Index is a great way to find profitable trading opportunities in the market without having to predict the direction of the price. Traders make a profit on volatile markets, whether the prices are going up or down.
The index is produced based on a Black-Scholes option pricing model, which computes the implied volatility of cryptocurrency option prices together with analyzing the market’s expectation of future volatility.
The CVI platform is in essence an AMM (Automatic Market Marker) that constantly sells volatility, while the volatility tokens represent a share in a shared pool of a LONG position. Whenever a token (either CVOL or ETHVOL) goes off-peg with its respective volatility index, an arbitrage opportunity is created. This allows the volatility tokens to be freely traded, while always remaining pegged to the index (Whenever a deviation from intrinsic value occurs, an arbitrage opportunity incentives a quick return to peg).
How many CVI (GOVI) coins are in circulation?
It has a circulating supply of 15,640,146 GOVI coins and the total supply is not available.
How is CVI (GOVI) secured?
The project uses the Chainlink architecture, which uses multiple independent oracles and external adapters to retrieve trading options data from across the market in order to calculate the CVI. CVI operates a permissionless, open-source protocol that includes a decentralized governance component so that any user can be a part of the development of the network.
How do I buy CVI (GOVI)?
The GOVI token can be used for a wide range of uses, like staking and governance.
GOVI tokens can be easily purchased by the following steps.
* Open an account with the crypto trading platform.
* Transfer the specific amount of your fiat currency to your account.
* Wait for your deposit to be confirmed and buy GOVI through your trading account.
Which Cryptocurrency Wallet Supports CVI (GOVI)?
The PTPWallet platform supports many cryptocurrencies simultaneously, such as CVI (GOVI). Because of its vast use case, it has grown to become one of the most used platforms, as it serves as an exchange and an engine to discover other cryptocurrencies. Users can easily use PTPWallet as their GOVI wallet because it offers a simple interactive interface, making it easy for people to navigate its system.