Welcome to the CVI AMA and thank you for joining us today!
My name is Bar and I am the Community Manager here at CVI.
I am more than happy to be the host for this round table community AMA, I am here with 5 more members from the CVI team, hey guys why don’t you introduce yourselves?
Yoni: Chief Innovation Officer
Costa: Product Manager
Gal: Head of Marketing
Tomer: Head of BizDev
Nir: General Manager
Hi guys, welcome. This is a very volatile time for the financial markets both traditional and the new crypto ecosystem. As we are growing the GOVI ecosystem of volatility products, I think it is a perfect time to answer your questions and help everyone understand more about our products and about your ability to trade and hedge against volatility. This is the first voice AMA of more yet to come, and it is very important for us that you as our community will be up to date and further make this dream a reality.
Thanks, guys, let’s continue.
We will start with the questions that the community asked us upfront on our discord server, once those questions are answered if we will have enough time, we will open the chat and give the opportunity to the community to ask some more questions!
OK, so the first question is:
- Shahaf said that 2022 is the year of adoption for CVI and GOVI but currently the trading volume, in general, is pretty dismal. What are your targets for CVI this year and how are you planning to reach these targets?
I believe that the roadmap for 2022 is very clear. We are not afraid of a long road and we are strong believers in the vision.
After we have built the Index and trading platform which are the foundation of the ecosystem -, This year we intend to launch very much Innovative volatility products such as the:
- IL Protection. The first of its kind impermanent loss solution based on the implied volatility of the market
- Theta Vault- next evolution of liquidity pools
- Leveraged Vol Tokens- after we will launch the theta vault, the liquidity issue will be solved and
We are putting all our energy and focus on these products that will create more ways to earn from Volatility, or to be precise, even when there’s low volatility.
I believe that those products combined with our new team of marketing, community, and BizDev who are working nonstop to create new opportunities, collaborations, and spread the “CVI word” will take CVI and GOVI to the next level.
We have 2 related questions so we will answer both of them together
2. The first one is- How is the Olympus Pro bonding program going and do you have a timetable for when it will end?
3. And the second one is, Will Olympus pro be run on MATIC as well? If so what’s the target for GOVI-ETH LP? When will farming emissions begin to be cut down? and What’s the target yearly APR goal for them?
The bonding program is going very well and the protocol has accumulated a significant amount of liquidity on Arbitrum in a short time. In parallel, the emissions on Arbitrum & Ethereum sushi pool have already been significantly cut down to the current target of 5–10% APY.
We’re happy to say that after achieving this milestone of sufficient liquidity on Arbitrum, in the upcoming weeks the bonding program will be gradually moving to Polygon.
The target for this next phase is to bond the already existing TVL on Polygon and possibly add to it up to 50%.
We’d like to thank everyone who has participated in the Bonding process, which will be great for the long-term success of the project. If you haven’t participated until now and wish to do so, get ready for the launch of the upcoming bond on Polygon!
4. Are there any plans to drive more utility to GOVI besides voting and staking?
In our view, we see GOVI as having a very clear utility and value proposition — which is to allow anyone to own a piece of the CVI ecosystem. When holding GOVI tokens you also become part of the GOVI DAO and its community, which owns the ecosystem as a collective.
In parallel to the upcoming launch of our more mature products — The Theta vault and leveraged volatility tokens, the next logical step as we see it in terms of the GOVI DAO is to continue growing, but differently than in the past.
If up until now we’ve been in an early adopters phase, the next step of growth should be to make users “work harder” to get their piece of the pie. This step can only be done when we have mature scalable products and we have many plans on how it will work once the Theta vault is launched.
Some obvious examples are trading competitions, others are forms of lock drops you have to earn and/or mechanisms that require users to bring value into the ecosystem to earn and become part of the DAO. These next steps are something we’re very excited about — they will obviously be up for voting, require the consensus of the DAO, and once approved they will be the focus after the coming launches.
5. Any plans to put GOVI on the new coin standard of COTI’s Multidag 2.0? Is there a possibility to integrate the volatility trading in COTI’s Viper Wallet?
One of CVI’s major advantages is being part of the COTI group and ecosystem.
This is something we are considering and will be decided up ahead.
The current solidity code is very sophisticated and I assume it won’t be integrated to the Viper wallet but integrating volatility or Leveraged VOL tokens could be interesting. To be decided.
6. Will Djed be integrated into the platform? And could this be done at the same time Djed launches, seeing as you are on the same team. Would bring some visibility to the project.
Djed has been launched on testnet a week ago and is still in great focus and efforts by the coti team to be launched on mainnet. It is a good idea and will be considered…
7. Are there any future plans to include an altcoin volatility index? Maybe a token that tracks the volatility of the top 3–100 projects. This past week has shown us that bitcoin/eth volatility can be stable (2% up and down) while alt coin volatility can range from 10–25%. Therefore opening a hedge on BTC/ETH wouldn’t be enough to protect traders that exclusively trade alts.
Adding new tokens obviously requires that crypto derivative exchanges — be they CEXs, or decentralized option platforms, will have sufficient liquidity of options trading for these altcoins. We’ve seen significant progress on this front, there’s also a new market for Solana options.
So we do see it happening, it seems more likely that the market for these altcoins will mature only as we head to 2023. To expedite things it’s likely we can add Solana or possibly Cardano before any other alt coins. In addition, obviously, we’ll have the leveraged volatility tokens out later this year, which will allow you to trade based on the main currencies’ volatility with bigger swings so a 4% movement can be equivalent to 8% or 12% and fill in the gap between the volatility of the main currencies vs alt coins.
8. Any progress on listing volatility tokens or GOVI on a new CEX / DEX?
This is something that our biz dev department is constantly working on
Kucoin, gate, Etoro, sushi, uni, etc …
The new development of our Theta Vault will allow us to provide liquidity to Vol tokens on more DEXes, and future development on our vault will allow us to provide Vol tokens to CEX. The code for the Theta vault is done and is currently under Audit.
9. When will the platform on Arbitrum (trading) go live?
We plan to launch the platform on Arbitrum after we deploy the theta vaults there.
Theta vault code is ready and currently under audit.
10. what are the marketing plans to attract more volatility traders?
Hey guys, there is another question about marketing and strategy so I’ll try to answer them both. Our plans include working in many different directions and with many marketing tools. First, some campaigns are running right now. If you’ll go to cryptobriefing you will be able to see a live index on the top banner. Users from Australia and the UK are targeted by our banner campaign on major sites such as investing.com, bitcoin.com, etc.
The idea is to combine strong community and social networks while working with DeFi influencers (which you’ll hear about soon), and banner campaigns.
We signed with, market across, the biggest PR company in the industry to penetrate mass media and be part of the press.
We have many videos and explainers under production right now. And many collaborations to come (We are attending the Permissionless conference in FL next week BTW). The last thing is “WEB 3” marketing, we are working with big companies to perform some WEB 3 campaigns that will attract new users while aiming mostly at traders.
All I said right now is only the tip of the iceberg, I know you guys want to see immediate results but I can promise you that it’s a process and we are working in various lanes to get to the point we all want to be in. And yes, if anyone wondered, we have a big marketing budget to perform everything we are planning (which is one of the biggest advantages of being part of COTI).
I must end with a request — as GOVI holders and our community we need you as well — To share, Retweet, and help us spread the word. you are an initial part of this amazing thing called CVI. I’m 100% sure that all of us are in the best place to be right now in DeFi.
11. How does IL Work? Let’s say I’m providing liquidity to a Uniswap ETH / USDT pool, how can I protect from IL? What are the fees associated? Does someone else need to provide liquidity on that pair first?
Impermanent loss happens whenever providing liquidity to a pool that has 2 or more tokens. In case those tokens are not correlated with each other, you would end up with more of one kind than the other. For ETH/USDT this means as ETH will go up you would end up with more USDT and less ETH, reducing your upside possible exposure to ETH. This means that if you were not providing liquidity your return in case ETH would go up would be higher.
Our new impermanent loss protection works by filling in the gap — You can safely provide liquidity, while any impermanent loss you incur on your liquidity will be covered. On the other side of the trade, there will be an Impermanent loss vault, which will allow passive investors to be the counterparty for the trade, in exchange for receiving premiums. In many ways, it will work similarly to an insurance company, but tailor-fit to DeFi and provide protection to solve this huge issue that deters many users from providing liquidity to DEXs.
12. After completion of the CVI vision in 2022 as mentioned in the last youtube video, is the idea to keep generating use cases for Govi or just expand the same products to other networks?
I think we are only at the beginning of our journey, the roadmap for 2022 will position us on the right track to fulfill the entire vision. We plan to further deepen our market share and brand as the volatility product leader in DEFI. we have many ideas yet to be discussed.
13. Will CVI be transitioning to on-chain options data to price the index in the future?
(Explain more as to the thought process behind using off-chain/on-chain options data.)
We’ve been exploring this and have been in discussions with some of the leading on-chain options platforms in DeFi. The thought behind this has been that — first we already know we can definitely add these sources as data feeds, while the question is will they fit under the same methodology, or should we have a separate index specifically for them.
The challenge to crack here is that the pricing for the on-chain options is in many protocols built around an AMM, and takes in various parameters such as the collateral ratio inside the AMM.
This type of pricing is different from the traditional methodology of having bid/ask determined by the free market. We have some ideas around this — but also would love to hear feedback from the community. Do you think it’s better to have a separate index for these as different types of DeFi options or continue the research to add them under one unified index? You can write to us here in discord with any thoughts about this moving forward.
14. Two questions combined:
1) Can you talk about which on-chain options protocols currently have your attention if any (dopex/premia/etc.)
2) Is CVI in any active talks to integrate/partner with other projects in the defi ecosystem? Can we get a sneak peek into the BizDev roadmap?
we are currently in talks with different DEX and DAO to implement our new product — IL protection. Naturally, we cannot reveal the names of the projects we are in contact with, But next week our Biz Dev team will attend the Permissionless conference, the biggest Defi conference in the world, to close the deals with our partners. More details will be released to our community very shortly!!
On the macro level, it’s important to the first state where we are now as a project and as part of the industry. With CVI we’re building something quite special — An ecosystem of volatility products with the flagship product of CVI as a market fear index for crypto.
The team built amazing tech to get to where we are. Creating funding fee-adjusted rebased volatility tokens was a big endeavor and technically challenging, building a vault that places liquidity partially on DEXs for these tokens was an even bigger challenge which is now behind us and went to audit.
On top of this — thanks to the fact we expanded the team we could parallelize and build a second big product while having two development streams going in parallel.
I’m personally very proud of the entire team for what we’re building.
All of this was done to build the foundations, while you — the community — are the early adopters of CVI.
So today, We are at the final stages of the early adopters phase.
The theta vault is the last key for maturity, as it will support the liquidity for the volatility tokens.
Liquidity in DeFi is absolutely key, without it there can’t be adoption.
So on the macro-level going forward, after launching the Impermanent loss protection which we think will be enormous, we see further major adoption after the Theta Vault launch, which will mark a transition from early adoption to a mature product.
We’ll have multiple vaults on each network, which will support the leveraged volatility tokens — Each of them supporting scalable liquidity that will allow low slippage for the volatility token traders. These products, which are the equivalent of the Market fear indexleveraged ETFs have been the vision of the project from inception so as you can tell — we cannot wait to see it running live finally.
Follow up: what is holding back more adoption of govi? What is the main factor the team looks to improve to grow the platform?
- Liquidity for CVOL, and L VOL Tokens. Which will be achieved by the theta vaults.
- Other volatility Products — IL Protection
- Marketing and Branding — which we are pushing very Hard
- Lastly — you guys as a proactive and strong community that brings more and more users and adoption.
16. Any plans on increasing leverage? 1–2x isn’t much for most traders and might see greater platform usage
The code of both the platform and the volatility tokens has been fully tested for leverage up to x8, it’s just a matter of a configuration parameter, so over time, it can go up. Priority though after the Theta Vault is to launch the leveraged volatility tokens with x2 leverage. We can later on launch tokens with increased leverage. Their value will be the CVI value multiplied by the leverage so they will be very volatile and create bigger opportunities for traders, and arbitrageurs as well as bring in more revenue to the ecosystem. I personally can’t wait to see the leveraged volatility tokens in production.
17. How does the theta vault work, currently it’s still very abstract and hard to understand, what it is exactly?
Let’s start with the great value the Theta vaults offer — The volatility tokens CVOL, ETHVOL (and in the future leveraged volatility tokens) are our flagship products. To work well they require as much liquidity as possible on dexes — Without liquidity, buying/selling volatility tokens would incur paying high slippage. As the volatility tokens pay a funding fee, they would always incur time decay. This will prevent creating a sustainable highly scalable source of liquidity for them — Unless a mechanism was developed to “prevent” time decay for (and ONLY for) the tokens on DEXs.
The Theta Vault will offer the solution — You can call Theta vaults “The next evolution of the CVI liquidity pools” — providing liquidity beyond the platform’s existing pools and into the decentralized exchanges (DEX). By adding the vault, the ecosystem will gain two major improvements.
1. The first and most significant improvement for the CVI volatility tokens is the support for liquidity scaling — The more liquidity there is for a token pair, the less slippage there will be for swaps created by traders.
As the tokens are subject to funding fees, they are not designed to be held for an extended period of time. This means that without a mechanism that allows the tokens to be paired in DEXs for long periods of time, their liquidity in DEXs cannot scale up.
2. In addition, the vault is beneficial to liquidity providers. Liquidity providers will hold volatility tokens on DEXs without incurring funding fees, this means they will also receive fees from every swap performed on the DEX, generating an additional revenue stream for them. By depositing to the vault, liquidity providers will be in a position to receive both funding fees and the DEXs liquidity pool fees, on top of that there will be GOVI rewards for the early adopters of the Theta vault.
Bar: Thanks costa, but can you please explain how it works exactly?
So how does it exactly work?
Let me give you an example: Lets say that on a given day, the value of users’ liquidity in the CVOL-USDC pair on a DEX was 100 USDC. Given that the index hasn’t changed and a few days have passed, the value of the liquidity part has increased to 101 USDC and CVOL-USDC value on the DEX has decreased to 99 USDC due to the funding fee. After running a rebase function both the liquidity value on the platform and the CVOL-USDC liquidity on DEX will be set back to 100 USDC.
Now, regarding the deposit and withdraw process to the theta vault , the minting/burning CVOL tokens and providing liquidity to CVOL-USDC on DEX will be seamless to the user and will be similar to providing liquidity to the liquidity pool.The main difference is that it will take up to 24 hours for the user to make a deposit/withdraw from the theta vault.
And one more thing to mention , the user won’t be charged with mint/burn fees for minting/burning CVOL tokens as part of his deposit to the theta vault.
18. Also, how do the GOVI stakers benefit from the Theta vault? Currently only minting and burning fees from vol tokens flow to the treasury but in my opinion stakers/the treasury should somehow also get a % from the off-platform trading volume because in the end that’s what we’re holding GOVI for.
As previously mentioned, Theta vaults will allow us to scale up the liquidity in the pools, supporting massive volatility tokens trading volumes.
GOVI stakers and Treasury will benefit from increased arbitrage volume which will result in more fees flowing into the Treasury and to GOVI stakers via a buyback.
We plan to launch 4 Theta vaults(including 2 leveraged ones) on each chain and each of them will have its arbitrage opportunities.
Great questions everyone, we have a few more minutes left, let’s answer some live questions.
For all of our updates and to join the conversation, be sure to check out CVI channels:
Telegram (group): https://t.me/cviofficial
Telegram (channel): https://t.me/cvichannel