Real-Time Position Management

Overview

Real-Time Position Management in CVI V4 introduces an innovative approach to managing on-chain trading positions on CVI. This feature leverages advanced Chainlink technology to provide traders with immediate and accurate data, enabling them to make informed decisions rapidly.

Integration of Chainlink's Low Latency Oracles

Chainlink's Low latency oracles are integrated to provide the most current and unsmoothed value of the Crypto Volatility Index (CVI). This integration ensures that traders receive up-to-the-second data for their trading activities.

Whenever a trader performs an action (such as opening, closing, minting, burning, depositing, or withdrawing), the low latency oracle is queried to fetch the current value of CVI. This ensures immediate execution of trades based on the most recent data.

Trade Execution and Protection

Trades are executed instantly, taking the maximum or minimum value between the standard CVI and the unsmoothed CVI. This method ensures that traders are operating with the most favorable and current data.

To safeguard against temporary deviations in the unsmoothed CVI, the system is designed to use both smoothed and unsmoothed values. This dual approach protects traders from anomalies and ensures a fair trading environment.

Execution Gap Metric

The 'Execution Gap' metric displays the difference between the smoothed CVI and the real-time, unsmoothed CVI value. It functions similarly to the price impact feature on platforms like Uniswap.

Traders can achieve 0% slippage on their trades when the execution gap is at 0%. This happens during periods of market stability when the smoothed and unsmoothed CVI values are closely aligned.

Slippage Settings and Market Volatility

The slippage settings in CVI V4 are designed to adapt to market conditions. During periods of high volatility, the real-time CVI is more likely to deviate, resulting in a higher execution gap.

Traders can manually adjust the max slippage cap to their desired percentage. This system incentivizes traders to make decisions before volatility spikes, reducing the likelihood of front-running and promoting fair trading practices.

Visibility and Transparency

Traders have access to real-time CVI values, both on the chart and the platform's front-end. This visibility ensures that CVI trading is more dynamic and responsive to market changes.

The implementation of low latency oracles involves nominal keeper fees, which are significantly reduced on layer 2 networks. The upcoming EIP4844 will further lower these costs, maintaining efficiency and affordability.