The AMA was held in the Gate.io Telegram group on June 1st, at 1 PM UTC.
CVI >< Gate.io
Welcome everyone to today’s AMA!
Today we have Crypto Volatility Index and our guest is Yoni
(Tomer is not able to make it)
Yoni, how are you doing today?
Hi Tom and everyone! Doing great, happy to be here today to talk about the Crypto Volatility Index
Glad to have you!
Yoni, could you tell everyone what your role is at CVI, since our banners had announced Tomer?
sure, I’m CVI’s Chief Innovation Officer, constantly working on the next steps in terms of architecture, growth and strategy
Could you please tell us what is CVI, and what are some use-cases?
In a nutshell — The CVI is a VIX for the crypto space.
The CVI index ranges between 0 and 200, and it tracks the 30-day implied volatility of Bitcoin and Ethereum.
Now, similarly to the VIX and the ecosystem of products around it, for CVI to be popular and widely adopted, there should be an instrument allowing traders to easily open positions against the index and trade it.
Therefore, as part of the CVI launch, we introduced an innovative and full-scale decentralized ecosystem which includes: The CVI trading platform, Volatility tokens, and the $GOVI token.
Both the platform (cvi.finance) and the volatility tokens allow people to trade the expectations of the market for future volatility.
So, 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.
In addition, it can be a great hedge against volatility & impermanent loss, since a long position on the index would increase in value when there is extreme volatility in either direction.
I invite everyone who is interested in reading more about our ecosystem and protocol to visit our Gitbook: docs.cvi.finance! We tried to explain there everything as clear as possible :)
Got it, glad to see the crypto space having its own equivalent of the VIX
On that note. what inspired the inception of the Crypto Volatility Index, and what would you say the project trying to achieve?
There are 2 charts that are always on our minds when we think about the future and are part of our vision. They show the adoption of the original VIX of the stock market over time
The charts show several years of warming up followed by exponential growth
In regular stock markets, the VIX is super popular, its ETNs have volumes of several billions per day! Due to the exponential growth that began with the VIX ETNs, we strongly believe that the CVI is a massive investment instrument. With the much higher volatility in crypto, there is no doubt in our minds that a VIX of crypto, such as the CVI, will be epic!
Half a year ago we launched our Volatility token CVOL, which allow anyone to take a long position on the index as simple as buying the token on a DEX. Next step coming soon is to build scalable liquidity for it, this will make it in many ways the equivalent of the VIX ETNs adapted to crypto, as an ERC20 token
Got it, makes sense!
Since you’ve mentioned CVOL already, Can you explain a bit more about GOVI now, your Governance Token?
Sure. The GOVI token is an ERC-20 token, currently tradable in Gate, as well as DEXs on Ethereum, Polygon and Arbitrum and acts as the governance token for the CVI protocol and the platform.
I believe we managed to do one of the fairest launches with the launch of GOVI.
The GOVI token was airdropped to over 3000 people, who claimed it over a period of several months.
In addition, 60% of the distribution is done over time to the platform’s users via liquidity mining.
This also makes a lot of sense in our view, as who is better to control the platform and become its owners than its own users who have a stake in the game.
By staking their GOVI tokens, GOVI stakers earn a share of the fees collected from the platform (which currently are used to buy-back GOVI in the market). In less than a year we reached $1 Million USD equivalent in fees distributed to GOVI stakers and we keep growing!
Understood on the GOVI side!
As we understand, you are also coming out soon with an Impermanent loss protection solution, can you please explain how it will work?
The CVI is the only protocol that provides this service to users without asking them for their liquidity — It can remain completely separate on a dex or staked elsewhere.
The CVI team is very excited to help liquidity providers protect their assets that would otherwise be exposed to impermanent losses. Using our proprietary model, any impermanent loss protection purchased will be reflected as an NFT that represents the coverage value, the appropriate time frame, and the pair selected by the user. Through this, any impermanent loss experienced will be automatically refunded to the user’s wallet for that time duration in a seamless and secure manner.
So by using CVI’s impermanent loss protection, users are able to supply liquidity in any chain, DEX, or platform. The users do not need to stake their LP tokens in order to purchase the CVI impermanent loss protection.
The liquidity itself can even be on a different chain than where the protection is taken.
This loosely coupled solution is key in our view — Since there is zero counterparty risk for the protection takers and it can protect liquidity on multiple different chains
I see, that’s interesting, and how do you calculate the Impermanent loss protection?
The calculation is part of how we leverage the CVI, as an indicator of implied volatility, to protect from impermanent loss.
We define the dependency between CVI and the expected IL percentage for the next 14, 30, and 60 days as a simple quadratic parabola fitted to the historical data. The effect of the curve can be explained by the following: When the volatility index is low, we can expect stable growth of ETH price, which concludes in high Impermanent Loss. When the volatility index is high, we can expect a plunge in the ETH price, which concludes in a high Impermanent Loss.
Ok I see the general thought process behind it. Thanks Yoni!
Now we will open the group up for questions from the community
Reminder to the community:
- Please do not copy questions that have already been submitted (copied questions will not be elegible for rewards)
- Please do not ask about where the token will be listed (It is listed on Gate.io)
Allright, thank you everyone for your questions!
I have 2 question
1- Is there any plans to increase leverage from 2x to higher leverages?
2- Do you have any competitors in market? If yes how do you get more attention and what features you provide to more attention?
1 — Definitely. Our platform’s code has been fully tested for leverage up to 8x.
Coming first later this year is our 2x leveraged volatility token
2 — To my knowledge we have the only working volatility tokens in the crypto market, which can keep their peg with the index.
In addition — The IL solution which will be launched soon is the first ever cross-chain and fully decoupled IL protection so we expect this to be very interesting to many users
Security is the most important thing to consider when wanting to start a project, how safe is project for users and investors?
Great quesiton — 100% on that! Security is the most important consideration.
Our code (which you can see on github) currently has 1600+ unit tests — Probably a world record in DeFi ;)
Besides this, there is currently ongoing 3rd independent audit for our code by external auditors
Most investors focus only on the short-term price of the token instead of the actual value of the project. So what are the benefits for long-term investors in project?
Owning GOVI makes you part of the GOVI DAO, which collectively owns the platform and index. This means long term investors get to be owners of a piece of the CVI, which is targeting to be the VIX of the crypto markets
CVI is a crypto volatility index, a decentralized version of VIX (known as the “Market Fear Index”) for the crypto market, predicting volatility in BTC and ETH for the upcoming 30 days.
As a trader, I make in depth research before making any investment decision. Can you tell us the accuracy of $CVI in predicting volatility of $BTC and $ETH in the last 30days?
What can holders of $GOVI, being the governance token of your platform benefit?
I would say that as a trader it would probably be best to think about the CVI not as a predicting indicator, but as a useful tool and trading vehicle that allows you to gauge and trade on the market’s expectations of future volatility.
The difference between the CVI and realized volatility is that it is forward looking — In one single number you can know what is the market currently expecting in terms of volatility for the next 30 days.
One of the great things about it is that it opens up many different strategies which you can apply if you agree or disagree with the market expectations. In regular financial markets it’s become so popular that the daily volumes of the VIX ETNs are above $2 Billion dollars on a daily basis!
Do you allow suggestions and feedback from the community? Are we allowed in decision making, do you put community into consideration ?
Definitely. Holding GOVI allows you to vote on platform decisions, there was just recently a vote last week of GOVI token holders.
As we progress onwards, the goal is that the control by token holders will ever increase, as it is key for the platform to be fully decentralized. The only VIX equivalent that can work for crypto must be a fully decentralized one, controlled by a DAO
My question plz :
Do you have tutorial videos so we can get to know your project more clearly or do you have a YouTube channel or something? can you share it with us?
You can find all the written information on docs.cvi.finance
Also, we do have video tutorials on how to use the index and how to use the volatility tokens.
Here is the platform tutorial video: https://docs.cvi.finance/learning-resources/cvi-platform-tutorial
Volatility tokens tutorial video: https://docs.cvi.finance/learning-resources/volatility-tokens-tutorial
In addition, some previously undisclosed information — we are working on a few more really great explainer videos that will be released in the upcoming days
Allright Yoni, I think that is enough questions answered for today
Thank you very much for taking the time to do so
Tom Rodriguez — [Check Gate.io telegram group admins], [01/06/2022 16:54]
Could you also share a few of your social media links so that our community can keep up to date?
Thank you Tom and everyone, was great to be here 🍻
If you have any further questions we have a really great community here on Telegram
Be sure to follow us also on Twitter to get updates on the new products launching very soon 👀
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