CVI — Market Fear Index for the Crypto Space

A new DeFi Primitive created by COTI

cvi.finance

  1. COTI is launching CVI, the first decentralized version of the VIX for the crypto market, covering major crypto assets.
  2. We have created CVI so that traders can hedge themselves against volatility or lack thereof.
  3. CVI is created by computing a decentralized volatility index from cryptocurrency option prices together with analyzing the market’s expectation of future volatility and working in a decentralized fashion by using a network of decentralized Chainlink oracles.
  4. COTI is also introducing a fully decentralized and self-adjusting trading system that enables a permissionless way to enter long/short positions on CVI.
  5. The $GOVI token will be introduced and act as a governance token for the protocol and platform
  6. Holders of $GOVI will share platform fees and will vote on matters such as the tradable assets, leverage used, deposit amounts, platform fees, and more.
  7. $GOVI distribution is a fair launch distribution model -
  • No token sale, no fundraising
  • No VC’s and no Whales
  • The total supply is minted gradually over three years and is capped to 32M $GOVI tokens, with no option to mint more
  • Allocation:
  • → Other Uniswap liquidity pools combined- 3.2M tokens
  • → Both of the above allocations are — locked until the platform is launched and achieves a set milestone
  • → Platform usage — 6.4M tokens

Abstract — What is the VIX and why crypto should have one?

Most of us have heard of the VIX index in the stock market, the index that is sometimes referred to as the “Market Fear Index”, measuring the implied market volatility and a counter index to the standard financial indexes that track upwards market movements.

Announcing CVI — a VIX for crypto

Today, we announce exactly that, CVI, a revolutionary and first of its kind decentralized VIX for the crypto market.

CVI in action

The below chart represents the Bitcoin price chart for 2020 with two visible market events:

  1. Defi-tokens price crash at the beginning of September 2020

Using the CVI platform

In addition to the index itself, we will also introduce a fully decentralized and self-adjusting trading system that enables a permissionless way to enter long/short positions on the crypto volatility index, allowing users to hedge themselves from market volatility.

Trading on CVI

There are a multitude of trading strategies using the volatility index.

1. “Black swan” — hedging strategy

If a trader expects that some large scale shock can affect the whole market, he can buy CVI and, if the market downturn really happens, the trader can make substantial gains from the trade.

2. Overheated market — hedging strategy

Unlike the previous trading strategy, this is a much more common situation for all financial markets. Let’s look at the last known one, at the beginning of September. The event is easily distinguishable on the Bitcoin price chart above, and even more so if we examine the Ethereum chart:

3. Back slope — speculative strategy

As demonstrated in the previous examples, after a sharp surge CVI usually goes down to its average levels. If a trader sells CVI at such a slope (like we can see in the third chart), the trader can make a profit once the index is going down. Like all speculative trades, this strategy is more sophisticated and requires more analysis, but on average it can be more profitable than the other examples described above.

Why $COTI?

At COTI, we always take pride in revolutionizing the way traditional finance works. We see ourselves as pioneers, bridging the gap between traditional finance and digital finance.

Introducing the $GOVI token — a governance token for CVI

CVI operates a permissionless and open-source protocol so any user can be a part of the development of the network.

  • Vote to change the fees
  • Vote to change D0 (opening position deposit size)
  • Vote to change Dmin (liquidation position deposit minimum level)
  • Vote on changes to the data source and aggregation protocol
  • Vote on trading platform changes and enhancements
  • Holders will share platform fees

$GOVI fair distribution model

CVI is a fair launch product. Distribution of the governance tokens ($GOVI) will run over a period of three years, with no pre-mine, no fundraising and no allocation for VCs or Whales.

  • ​15% incentives for liquidity providers to migrate to CVI (4.8M tokens)
    1. COTI — ETH Uniswap liquidity pool — 1.6M tokens
    2. Other Uniswap liquidity pools combined- 3.2M tokens
    ​ 3. Both of the above allocations are — locked until the platform is launched and achieves a set milestone
  • 15% development fund — distributed over 3 years (4.8M tokens)
  • 60% users of the CVI platform for their usage and liquidity — distributed over 3 years (19.2M tokens)
    1. Platform liquidity providers — 12.8M tokens
    2. Platform usage — 6.4M tokens
  1. Make a claim for $GOVI by clicking “Claim” in their wallet during the scheduled claim period
  2. Hold or stake at least 10K $COTI or more during a randomized snapshot of the wallet

What to do now?

  1. If you don’t already have a COTI Pay VIPER wallet, go ahead and create one now (we have grown our onboarding team to have expedited processing during this time).
  2. Once you have a wallet, make a claim for $GOVI by clicking the “Claim” button.
  3. If you made the claim and you meet the criteria, congrats, you will be one of the first to own a $GOVI token.
  4. If you own a COTI ERC20 token, consider posting liquidity on COTI ERC20/ETH pair on Uniswap: here, to receive $GOVI
  5. Follow this page to see your stack of $GOVI grow

Stay COTI!

CVI is a decentralized volatility index for the crypto space — powered by COTI network