Built around DAG technology, COTI Network is focused on bringing the most popular financial tools to blockchain-based systems. Today it introduces the decentralized Crypto Volatility Index, a unique instrument for traders that allows them to earn on volatility spikes.
Crypto Volatility Index (CVI): here's how crypto holders can benefit from market volatility
According to a press release shared with U.Today, COTI Network launches its Centralized Crypto Volatility Index (CVI). When a crypto holder expects crypto market volatility to move in either direction, he/she can open USDT-settled position or provide liquidity to a dedicated pool associated with CVI.
If volatility spikes, traders can close their positions with benefits. Otherwise, if volatility drops, liquidity providers can earn on their idle tokens from trading fees paid by traders who opened the positions.
CVI can be acessed with Metamask and Trust Wallet. Its intuitive interface makes the entire process of liquidity provision and opening and closing of positions seamless and transparent. CVI values are calculated by automated research of market volatility expectations.
Therefore, CVI strategy allows newbie and sophisticated traders to hedge against free falls in the prices of their assets.
Staking, rewards and leverage: next steps for CVI ecosystem
Conditions for participating in CVI operations appear to be relaxed. To earn the most from liquidity pools, USDT owners need to lock their assets for at least 72 hours. CVI traders can close their positions six hours after the opening minimum.
Once CVI goes live in mainnet, crypto owners can stake and unstake GOVI, the index's native governance asset, to earn platform fees and participate in governing referendums. Crucial CVI updates (assets indexed, leverage ratio, deposit amounts, fees and so on) will be approved by vote.
During the next stages in CVI project development, Ethereum (ETH) and Coti (COTI) will be added as deposit assets. Derivatives market data tracking and an advanced dashboard for professional traders will also be implemented soon.