An Israel-based blockchain startup, COTI, today launched the cryptocurrency industry’s first decentralized Crypto Volatility Index (CVI). Users will be capable of placing positions in expectation of significant variations in either direction. COTI is a blockchain project representing itself as a “fully encompassing finance” on the DLT. The startup elucidated that the stock market’s Volatility Index encourages CVI. The CVI is now live on the mainnet. Moreover, users who intend to engage can deposit Tether (USDT) to initiate positions or offer liquidity.
Moreover, traders can open a CVI position to increase volatility and examine profits by selling their position again. Conversely, traders can benefit from low volatility by offering liquidity to the platform. If their position sets out to be correct, liquidity providers can accumulate fees from traders who have started CVI positions. Technically, the Crypto Volatility Index estimates a decentralized volatility index. It is based on the Black Scholes option pricing model from cryptocurrency option prices along with market expectation analysis of future volatility.
Users to connect CVI Index with MetaMask or Trust Wallet accounts
COTI elucidates that users would also combine the CVI index with their MetaMask or Trust Wallet accounts. It is to maintain their positions, procure liquidity, and deposit/withdraw funds. Those who choose to offer liquidity need to deposit USDT for a minimum of 72 hours before getting a share of the pool’s premiums. On the other hand, traders who have started a position must manage it for at least six hours before trading or closing it.
GOVI is the governance token of the crypto volatility index. Holders would employ the token to vote on essential matters such as the type of asset traded on the platform, the amount of leverage, and other specified purposes. Holders of the token would also be capable of staking the token. This would enable them to collect fees and participate in voting on concerns about the system. COTI has asserted that the platform would quickly add Ethereum, and COTI as deposit tokens. This would complement the prevailing deposit token, which is USDT.
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