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For CVI to be popular and widely adopted, there should be an instrument (system) allowing traders to easily open positions against the index and trade it. Therefore, as part of the CVI launch, COTI will also introduce an innovative and full-scale decentralized ecosystem that includes; The CVI Platform AMM, Volatility tokens, Theta vault and the $GOVI token.
In our efforts to create a full-scale decentralized ecosystem, along with developing the CVI Index, we created a user-friendly platform allowing users to trade the index directly and hedge themselves to market volatility or lack thereof.
The liquidity provided is utilized by the CVI AMM (Automated market marker), which sells volatility according to the index value, it is in essence the other side of every trade done by traders. The AMM takes into account the market demand for volatility in a given moment, as well as risk management metrics of the liquidity providers.
By buying and selling Volatility Tokens, traders can easily trade volatility on DEXs and even CEXs, making the Crypto Volatility Index (CVI) much more composable and accessible to the greater DeFi ecosystem.
The unique technology behind the Volatility Tokens allows them to be easily tradable on DEXs and secondary markets without losing their peg to their relevant index
The defining idea of CVI V3 and its new features, including our new innovative liquidity vault: the Theta Vault, is to allow a sustainable and scalable source of liquidity for the CVI volatility tokens on any secondary market and decentralized exchange.
The CVI platform is governed by the $GOVI token.
85% of the platform generated fees will be collected and used to buy GOVI tokens on the market, reducing the token supply in the open market and will be distributed to the CVI ecosystem members, such as CVI traders, liquidity providers, and GOVI stakers in the form of open positions and staking rewards.
15% of the fees generated and collected by the platform and the ecosystem will be used to fund the GOVI treasury, to be used for the CVI ecosystem’s further growth and development.