The AMA was held in the Gate.io Russia & CIS Telegram group on February 15th, at 12pm UTC.
We were honored to be invited to the Gate.io Russian telegram group for an amazing AMA.
The Gate.io team and community asked us amazing and very interesting questions, which Yoni, our Chief Innovation Officer, was more than happy to answer.
Hello Yoni Neeman! Thanks for joining us today. We have prepared some questions and can’t wait to ask them.
Hello guys! It’s a pleasure being here, thank you for hosting us. Looking forward to a great AMA!
Could you please tell us what is CVI, and what are some use-cases?
In a nutshell, CVI is the 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, 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, we introduced an innovative and full-scale decentralized ecosystem that 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: https://docs.cvi.finance !
Founders of the project and a little background on how you came together?
CVI was created by the COTI Team in a joint venture with the original creator of the VIX, Professor Dan Galai, to develop this new “market fear index” for the crypto market.
COTI has been in the blockchain space since 2017, specializing in the payments and finance sectors. Given our strong network, we reached Prof. Dan Galai and started working together to bring this very popular “Market Fear Index” to the crypto space!
What inspired the inception of the Crypto Volatility Index, and what is the project trying to achieve?
There are 2 charts that are always on our minds when we think about the future. 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:
You can see the warming up up to 2009 — Then exponential growth.
In regular stock markets, the VIX is super popular, its ETNs have volumes of several billion per day! Due to the exponential growth that began when the ETNs launched, 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.
Can you share with us what your platform allows users to do and how to participate in layman’s terms?
As we mentioned before along with the CVI index, we have created a user-friendly and decentralized platform ( cvi.finance ) that allows traders to trade the index directly according to their belief in the market.
Here it goes a quick summary of how it works:
- Open a position in the platform if you believe volatility is about to increase, as a speculation or as a hedge for your portfolio.
- Provide liquidity to the platform f you believe the index value is about to decrease or remain stable (Liquidity Providers also earn a share of the platform fees collected from open positions)
- Earn $GOVI, the DAO token of CVI, on all of the above.
- Stake $GOVI to earn additional rewards and have voting rights in our community.
Recently, we launched our Volatility tokens (CVOL & ETHVOL), which allow anyone to take a long position on the index as simple as buying the token on a DEX.
Can you explain a bit more about GOVI, your Governance Token?
The GOVI token is an ERC-20 token currently tradable in Ethereum mainnet and Polygon (soon also in 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. In less than a year we reached $1 Million USD equivalent in fees distributed to GOVI stakers and we keep growing!
Thanks for answering our questions Yoni. Now we are going to open the chat to let our community ask some questions.
Have you been audited?
Yes, we take security very seriously and while we developed the platform during 2021 we conducted 2 different audits with known firms, PeckShield and CERTIK.
You can see the audit results here: https://docs.cvi.finance/deployed-contracts-and-code-audits/audits
We are also soon going to perform our third audit, and first of 2022 which we would announce soon in our official channels as well.
What are volatility tokens for in the CVI ecosystem?
The volatility tokens are a new and unique DeFi primitive we created — They allow anyone to go long on the index as simple as buying a token on a dex! We launched two tokens — CVOL (Which tracks the CVI) & ETHVOL (which tracks the ETHVI index — a specific index only for ETH implied volatility)
Anyone expecting implied volatility to rise can buy one of the tokens — without even needing to go to the platform site.
These tokens are designed to be the crypto equivalent of the hugely popular VIX ETNs which I previously mentioned
Can you briefly describe your partnerships at the moment and upcoming partnerships?
we have a number of very important partnerships we closed while developing the platform.
We are a strategic partner of Chainlink for example, and one of the first users to use Chainlink Keepers to calculate the CVI index Value, and we are now putting to the community vote if we should proceed with the Olympus PRO partnership.
On the business side of things we did many interesting collaborations with EPNS, DappRadar, Alchemist, Orion, and many more protocols to increase awareness of the protocols, and you can expect many more to come this 2022!
What wallets can be used to work with your platform?
You can use almost any wallet supporting ERC-20 tokens, Metamask it’s the most popular of course, but there are a wide variety of options via the connect wallet bottom at the top right of the platform.
What is the difference between Crypto Volatility Index and Fear & Greed Index?
First, I think Both are great tools that can fit well with any trader’s toolset.
The difference between them is in the very different way each of them measures the fear in the market
The CVI works similarly to the VIX — the market fear index of the regular stock market. Meaning, CVI works is by looking at the prices of options on BTC & ETH — The higher these options are, the more it means that traders are expecting volatility in the future (to either direction). Since options are used to protect from volatility on one side, as well as receive yield when the market is stagnant (by option sellers), they are a great way to measure fear.
So, the more fear in the market, the higher the prices of option and the higher the index will be. The key here is also that the index creates a standardized methodology for measuring it — with one single number you can get an insight into how much fear (or lack of) there is in the crypto derivatives markets
Crypto Volatility Index intends to build a complete ecosystem, so what parts of the project are created for this ecosystem?
First, We are in constant build-mode so you can expect to see the CVI ecosystem continue to expand throughout 2022 and 2023. We’ve recently expanded the team for this purpose.
Right now as part of the ecosystem we have:
- An AMM which sells volatility (CVI / ETHVI) as a structured product
- Trading platform which allows traders to open a position on CVI / ETHVI + Support for leverage
- Volatility tokens on dexes
- Auto-compounding staking of GOVI + Buyback mechanism of GOVI from platform fees
On top of these there are going to be more new products coming this year which we’re all very excited about.
Are there payouts for holders of your coins, as is done with the stock market?
Yes, 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 and 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.
15% of the fees generated and collected by the platform and the ecosystem will be used to fund the GOVI treasury, to be used for the CVI ecosystem’s further growth and development.
What’s the main difference between trading volatility in the platform and trading volatility with the tokens?
The tokens add a layer of composability on top of the existing platform. When trading directly on the platform the position is connected directly to your account, while trading the tokens allows you to simply swap from USDC to the token if you think volatility will increase, then swap the tokens back to USDC if you think it’s about to decrease.
This concludes the AMA session and thanks to the CVI team for taking the time to spend it in our community!
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