The Crypto Volatility Index (CVI) is a decentralized VIX for crypto that allows users to hedge themselves against market volatility and impermanent loss.
Decentralized finance, or DeFi, one of the largest industries in the cryptocurrency space, surged to more than $150 billion in May 2021. Volatility trading is set to be the next big development for DeFi, ultimately giving traders one more way to profit from the cryptocurrency market’s volatile nature.
With this in mind, active traders, hedge fund managers, and institutional investors now require tools to track the volatility of the cryptocurrency market. Experienced traders will otherwise continue to use riskier strategies like long straddles and strangles.
On the other hand, the emergence of the derivative market has signaled the need for solid pricing strategies as well as reliable risk measures. There is a growing need for a new decentralized volatility index that provides a proper estimation of the risk measurement of the cryptocurrency components, and a delivery of market status information to potential investors.
As such, we believe the crypto market needs a volatility index that is decentralized and dynamic, unbiased, and not connected to any exchange.
Today, we announce exactly that, CVI, a revolutionary and first of its kind decentralized VIX for the crypto market so that traders can hedge themselves against volatility or lack thereof.
CVI is a full-scale decentralized platform that brings the sophisticated and very popular “market fear index” to the crypto market and is created by computing a decentralized volatility index from cryptocurrency option prices, together with analyzing the market’s expectation of future volatility. We believe that CVI provides the most reliable DeFi tool suitable for analyzing volatility, hedging portfolios and earning from being a liquidity provider.