The Crypto Volatility Index (CVI) is a decentralized VIX for cryptocurrencies that allows users to protect against market volatility and impermanent losses. Read on to learn more about the CVI project.
What is CVI (GOVI)?
CVI is the first decentralized VIX of its kind for the cryptocurrency market so traders can hedge against volatility. CVI is a large-scale decentralized platform that brings the sophisticated and hugely popular “Market Fear Index” to the cryptocurrency market. It is created by calculating a decentralized volatility index of cryptocurrency option prices and analyzing the expected future volatility of the market.
CVI provides the most trusted DeFi tool to analyze volatility, hedge portfolios and earn as a liquidity provider. It is an innovative, decentralized, stable, transparent, informative, and repeatable benchmark for cryptocurrency volatility information. The CVI was created by the COTI team in partnership with Prof. Dan Galai, the creator of the original VIX, to create a “market scare index” for the cryptocurrency market.
By calculating a Decentralized Volatility Index (CVI) from cryptocurrency option prices, the new system analyzes the expected future volatility of the market. The COTI method responds to the challenging liquidity environment of this evolving asset class and allows us to extract the data needed to assess implied volatilities.
How does CVI (GOVI) work?
Trading the CVI index is a great way to find profitable trading opportunities in the market without having to predict price direction. Traders take advantage of volatile markets whether prices go up or down. The index is produced based on a Black-Scholes option pricing model, which calculates the implied volatility of cryptocurrency option prices along with analysis of expected future market volatility.
The CVI platform is essentially an AMM (Automatic Market Marker) that continuously sells volatility, while volatility tokens represent a share in a shared pool of a LONG position. Each time a token (CVOL or ETHVOL) breaks out of the pattern with its respective volatility index, an arbitrage opportunity is created. This allows volatility tokens to be traded freely while still remaining indexed to the index (whenever a deviation from intrinsic value occurs, an arbitrage opportunity encourages a quick return to indexing) .
What is the CVI (GOVI) used for?
- Trade – CVI isiser for trade. If the volatility increases, you will make a profit regardless of the price change. Traders can use CVI to protect their cryptocurrency holdings against volatility. For example, a trader may be long in a portfolio of several major currencies and fear adverse market conditions.
- Providing Liquidity – 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 took a position on the CVI and lost that trade, the liquidity providers are the ones who recover the lost trade and vice versa.
- Stake – Get governance rights and platform fees from all supported networks with just a few clicks. $GOVI token staking is currently available on Polygon and Arbitrum.
- Arbitrage – Maximize revenue from your trading strategies by taking advantage of any spread between volatility tokens traded on DEX/AMM and the CVI platform.
For the CVI to be popular and widely adopted, there must be an instrument (system) that allows traders to easily open positions against the index and trade it. Therefore, as part of the launch of CVI, COTI will also introduce an innovative large-scale decentralized ecosystem that includes the CVI trading platform, volatility tokens and the GOVI token. The CVI ecosystem is made up of the following components:
The CVI platform allows users to trade the CVI index, provide liquidity for trading fees, and stake the LP tokens they get by providing liquidity and the GOVI token for additional rewards.
By buying and selling volatility tokens, traders can easily trade volatility from DEXs and even CEXs, making the Crypto Volatility Index (CVI) much more composable and accessible to the broader DeFi ecosystem.
85% of the fees generated by the platform will be collected and used to buy GOVI tokens on the market, thus reducing the supply of tokens on the open market. The remainder of the token supply will be distributed to members of the CVI ecosystem, such as CVI traders, liquidity providers, and GOVI stakeholders, in the form of open positions and staking rewards.
The “GOVI” token is an ERC-20 token and acts as a governance token for the protocol and the platform. GOVI’s total supply is limited to 32 million tokens, with no possibility of minting more. The initial offering has been launched for native COTI holders and liquidity providers of COTI-ETH pools in the Uniswap. After the airdrop, the distribution of $GOVI was defined according to the model below:
GOVI holders who are part of this ecosystem will be able to:
- Receive part of the platform fee.
- Vote for trading platform changes and improvements.
- Vote for changes to the data source and aggregation protocol.
- Vote to change Dmin (minimum deposit level of settlement position).
- Vote to change D0 (open position deposit size).
- Vote to change the rates.
- Vote to change leverage.
The GOVI token is a governance token for the CVI protocol and platform. CVI is a decentralized volatility index for the crypto space, powered by the COTI network. GOVI holders will vote on key CVI issues such as tradable assets, leverage used, deposit amounts, platform fees and more. There is an exceptional stock of 15.640.146 GOVI parts.
Where to buy the GOVI token?
The GOVI token can be purchased on several major cryptocurrency exchanges, some of the largest of which are: Gate.io, KuCoin Uniswap (v2), and Bilaxy.
CVI Price Prediction (GOVI)
The price of CVI is likely to reach a high of $0.5692022 throughout 2023. According to our Crypto Price Prediction Index at 1.095, the price of CVI (GOVI) might reach a high of $0.8142025, with an average trading price of $1,320. According to our Crypto Price Prediction Index, in 2019, GOVI is expected to break through an average price level of $10,000.
The minimum expected value of the CVI price at the end of the current year should be $1.219. Moreover, GOVI can reach a maximum price level of $1.169.2030. CVI price is expected to reach the lowest possible level of $2.155 in 1.624. According to our Crypto Price Prediction Index, GOVI price could reach a maximum possible level of $10,000, with an expected average price of $1,000.
O LCI is a large-scale decentralized platform that brings the sophisticated and hugely popular “market fear index” to the cryptocurrency market and is created by calculating a decentralized volatility index from cryptocurrency option prices as well as an analysis of expectations of future market volatility. We believe CVI provides the most reliable DeFi tool for analyzing volatility, hedging portfolios, and profiting as a liquidity provider. PortalCripto hopes that the article has brought the necessary information about the CVI project.
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* PortalCripto values the quality of the information and attests to the verification of all the content produced by its team, emphasizing however that it does not make any type of investment recommendation, not being responsible for losses, damages (direct, indirect and accessories ), costs and loss of profit.
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What is CVI coin (GOVI) token, DeFi and price prediction? | PortalCrypto
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