Crypto Volatility Index — A Status Report and Next Steps
We revealed our vision for the first decentralized Crypto Volatility Index in early October, designed not only as an indicator of volatility for the entire crypto market, but also as a trading platform on which traders can either directly trade volatility or use the platform to hedge their existing positions on other trading platforms.
Since then, we’ve released the centralised Beta version of volatility index, demonstrating the feasibility of the math that powers the index, based on the Black-Scholes option pricing model. The index has now successfully been tracking volatility on the crypto markets for the past two months.
As we move forward with the decentralised Beta release of both the volatility index and the underlying trading platform, we’d like to take this opportunity to update our community as to what the final stages towards this release will involve:
- We’ve noticed a lot of confusion in our community in regards to the volatility index sharing the same name as the governance token for the platform. As such, we have made a final name change to both the platform itself and the governance token. From this point on, the volatility index will be known as CVI, the Crypto Volatility Index, and the governance token for the trading platform will be known as $GOVI.
- The final claim process for the initial distribution of $GOVI tokens is now underway. As a reminder, in this initial claim period we’re distributing:
- 3.2M $GOVI tokens for $COTI holders who made a claim via the COTI Pay wallet
-1.6M $GOVI tokens for $COTI holders who supplied liquidity to the COTI/ETH liquidity pool on Uniswap
- Over the next three years, a further 19.2M $GOVI tokens will be distributed to traders and liquidity providers of the CVI platform once the trading platform is enabled. 12.8M $GOVI tokens will be distributed to liquidity providers for the platform and 6.4M $GOVI tokens will be distributed to traders using the platform.
- We’ll be releasing the whitepaper for CVI later this week. The CVI whitepaper includes all the formulas, use cases and calculations that power the index. This whitepaper has already been reviewed by industry experts (more to come on this soon) and we’re now releasing this to the community for peer review as well.
- The initial decentralised release of the platform will operate in testnet mode and will be released by the end of December. Testnet will be operational for a period of 7–14 days to ensure there are no critical bugs before real liquidity is added to the trading platform. This will also allow users an opportunity to educate themselves on how to use the platform and trade volatility without the risk of losing funds.
- In testnet mode, users will be able to trial the platform using testnet USDT to provide liquidity and make trades as they would on the mainnet version of the platform. To encourage users to test the platform, we’ll be hosting an incentivised trading competition in which all participants will receive the same stake of testnet USDT to trade volatility on the platform. At the end of the 7–14 days testing and trading period, users who have the highest percentage returns on their initial stake will share in a further distribution of 120K $GOVI tokens. Stay tuned for more details in a follow up announcement.
- We believe that safety comes first and this is exemplified in our approach to a staged rollout of testnet and mainnet. To complement our internal audits, we have also engaged Certik to audit all platform smart contracts and these results will be published as soon as they are available, expected to be in mid-January.
- Once the testnet phase has successfully completed, we’ll then launch the trading platform in mainnet mode. This will allow users to supply liquidity to the platform in the form of ETH and USDT. Once $500K USD of equivalent value (TVL) has been supplied as liquidity to the platform, $GOVI tokens will be distributed to all users who have made a successful claim during the claims process and testing phase.
- $GOVI tokens for the initial circulating supply have been minted and are now sitting on the following address, awaiting distribution: https://etherscan.io/token/0xeeaa40b28a2d1b0b08f6f97bb1dd4b75316c6107
- The initial circulating supply for the $GOVI token will be 5.767M:
- 4.8M $GOVI tokens for $COTI holders who made a claim
-847K $GOVI tokens for the CVI development fund
-120K $GOVI tokens as incentives for the CVI testnet period
- Upon distribution, $GOVI token holders will be able to immediately stake $GOVI tokens on the trading platform and receive a share of trading fees on the platform as a result.
- Shortly after the release of the trading platform, we’ll also be adding $COTI as a liquidity token. Users with $COTI tokens will receive reduced platform usage fees and will earn $GOVI designated for liquidity providers on the platform at a higher rate than other tokens (initially ETH & USDT).
- Further liquidity tokens to be added to the platform will be decided by $GOVI token holders via the CVI governance process.