The CVI was created to provide an infrastructure for crypto market participants to hedge, trade, and take positions on perceived crypto volatility. It has been an exciting and rewarding time for the team, and as we close out Q1 2022, we are releasing our roadmap for the remainder of the year. This roadmap will outline all the key milestones we are aiming to achieve in 2022, and also provide more details to our community on our most urgent technical releases.
The 2022 Roadmap
In January 2022, we launched the CVI Staking V2 on Polygon & Arbitrum as a way of mitigating Ethereum’s high gas costs. Since then, we have gone on to issue our first community vote, offer a much higher APY to GOVI-ETH liquidity providers, host multiple AMA’s, and lots more. In the coming months, we will continue to offer innovative solutions to trade and access volatility through the CVI and our partner ecosystem.
Tokenomics
Starting the year, we realized that retail trading activity was increasing on the CVI and released an updated version of our GOVI staking on both Arbitrum & Polygon Networks. This launch enabled us to provide a more cost-effective, scalable, and secure solution to our retail investors while ensuring any accumulated staking rewards were not lost to high gas fees and transaction costs. We encourage our community members to check out our staking solutions here: https://cvi.finance/staking
GOVI Rewards
Since inception, the CVI has seen over $130M in trading volume and generated over $1M in fees that has been distributed to all $GOVI stakers accordingly. This year, we realized that while the $GOVI rewards are much higher than other comparable protocols, there was still a slight inconsistency given their dependence on platform usage (which will usually fluctuate with market conditions).
In January, we introduced a fixed $GOVI distribution schedule that will enable an appropriate and consistent amount of rewards to be distributed every week. Through our GOVI Staking V2 release, we will be distributing 28,000 $GOVI (14,000 each on both Polygon & Arbitrum) as a way to ensure reward consistency. Find out more about this in this article: https://cviofficial.medium.com/govi-staking-v2-is-now-live-3b7211d0069
Auto-Compounding of GOVI Rewards
Auto-compounding of staking rewards is another feature that was released this year. Through this, GOVI stakers had their accumulated rewards automatically compounded on the CVI platform. A major benefit of this is that users would be able to increase their rewards automatically, and without having to claim and re-stake their $GOVI on a regular basis. In the long run, the auto-compounding feature will save our community both time and money (through reduced network fees), while ensuring token appreciation.
The auto-compounding feature is currently live on both Polygon and Arbitrum.
$GOVI Buy Back
As a decentralized platform, 85% of the platform fees that were until now distributed to GOVI stakers, will be collected and used to buy GOVI tokens on the market, which in turn will be distributed to the CVI traders, liquidity providers, and GOVI stakers in the form of open positions and staking rewards.
Liquidity bonding
Following our community vote in March, we are pleased to be moving forward with Olympus Pro bond program. As the industry leading platform for liquidity management, Olympus Pro will enable the CVI protocol to own and manage its liquidity — thereby creating an additional liquidity source for the CVI.
The bonding mechanism will be launched in a few days on the CVI and through this upgrade, users will be able to trade in their GOVI-ETH SLP and get $GOVI at a discounted rate. The long-term benefits of this mechanism is that the CVI will be equipped with an additional source of liquidity, there will be an increased value to the CVI treasury given the increased trading fees, and finally good exposure to ETH paired assets in liquidity pools, And will decrease the amount of GOVI in the market.
The Olympus Pro bond program will be launched on Arbitrum network. Expect an official announcement ahead of the go-live.
Impermanent Loss Protection
Impermanent loss is a common issue when supplying liquidity in the world of decentralized finance (DeFi). In simple terms, Impermanent loss (IL) is the risk that liquidity providers take in exchange for fees they earn in liquidity pools. When the IL exceeds the fees earned by a user when they withdraw, the user has suffered negative returns as opposed to simply holding their tokens outside the pool.
Heading into the year, we will continue to release new functionalities to the CVI platform that will enable widespread utilization across high-frequency institutional traders and retail traders alike. Our impermanent loss protection will enable liquidity providers to limit their exposure to the volatility of their underlying token deposits. We will be releasing this functionality sometime in Q2 2022. In the meantime, we encourage crypto traders and market participants to utilize the CVI for both hedging and profit-taking in today’s uncertain markets.
“Our intention is to utilize the best effort of the technology in order to try protecting the liquidity from impermanent loss, to provide a way of protection and to allow the DeFi ecosystem to grow much more, people will provide more liquidity with a quiet mind”
Nir Arazi CVI’s General manager
Theta Vault — The next evolution for liquidity providers
The Theta Vault is the next evolution of the existing CVI liquidity pools — expanding the liquidity provision beyond the platform’s current pools and into liquidity on Decentralized Exchanges (DEX). This release will simultaneously add two major improvements to the ecosystem.
1. The first improvement and most significant improvement is the supported scalability, and much deeper liquidity for CVI volatility tokens. Due to the nature of AMMs (Automated Market Makers), deep liquidity for tradable tokens is essential for traders since the more liquidity there is for a token pair, the less slippage there will be for swaps created by traders.
In the case of CVI volatility tokens, liquidity provisions have to be designed in a unique and pragmatic approach. It’s important to remember that since the tokens incur funding fees, they are not designed to be held for a considerable amount 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. The Theta Vault offers the key — its unique design allows it to hold both the liquidity in the platform and the volatility tokens liquidity on DEXs.
2. The other improvement is the fact that the vault benefits the liquidity providers. Since LP’s will be holding volatility tokens on DEXs without incurring funding fees, they will also be receiving fees from every swap done in the DEX — incurring an additional profit stream in the process. By depositing to the vault, LP’s will be in a position to receive both the staking GOVI rewards, and also the DEXs liquidity pool fees.
Look out for this launch in Q2 — we will also be providing more information about the mechanism ahead of launch.
Multichain VOL Tokens
In Q3, we will be releasing our multi-chain VOL tokens. We believe as DeFi continues to grow, there will be a considerable need for multi-chain volatility tokens.
In 2021, we launched ETHVOL on Ethereum and CVOL on Polygon as a way for traders to trade volatility and profit from short-term arbitrage opportunities. Taking a few steps forward, we will be launching multi-chain volatility tokens to reduce the friction users experience as they migrate their tokens from one chain to another. Our Theta vault liquidity solution will also be a huge assistance in solving this problem for our users.
The volatility tokens will be launched on Arbitrum and other new networks, alongside a compatible Theta vault applicable to each one of the networks.
Leveraged Volatility tokens
The vision of the CVI is to build an ecosystem equivalent to the Market fear index of the traditional stocks market, adjusted for the crypto markets. With a daily volume of billions of dollars, leveraged ETNS are the market fear’s index most popular and widely used products. The CVI leveraged volatility tokens are designed to be the crypto equivalent of those. The high capital efficiency offered by the tokens will allow traders and hedgers to take short term trades on volatility, as well as intraday trading — making them a perfect tool for day traders and high-frequency traders alike.
Our CVI leveraged volatility tokens will also be released in Q4. Through this, traders will be equipped with a mechanism that can amplify any potential profits. This will be one step forward following the launch of our volatility tokens, CVOL & ETHVOL, which were both launched in November 2021.
Closing Thoughts
Tackling the milestones above will require the efforts of both our technical and business teams, in conjunction with our community for feedback. We are excited to see the huge number of participants in our first ever community vote, and we look forward to continuous community engagement in all our upcoming activities.
2021 was a breakthrough year for CVI and given the milestones we have covered so far, we are confident that 2022 will be another successful year for CVI.
For all of our updates and to join the conversation, be sure to check out CVI channels:
Website: https://cvi.finance
Whitepaper: https://cvi.finance/files/cvi-white-paper.pdf
Twitter: https://twitter.com/official_CVI
Telegram (group): https://t.me/cviofficial
Telegram (channel): https://t.me/cvichannel
Discord: https://discord.gg/48K9EupjqY
