Cryptocurrency traders that want to benefit from the infamous market volatility would be able to do so by taking advantage of COTI’s recently launched Crypto Volatility Index (CVI). Users will be able to place positions in anticipation of significant fluctuations in either direction.
COTI is a blockchain project that describes itself as a “fully encompassing finance” on the distributed ledger technology. It’s designed to meet and address challenges of traditional finance, such as fees, latency, global inclusion, and risk.
The project referred to traditional finance as well with its latest product – the Crypto Volatility Index. COTI said in a press release shared with CryptoPotato that CVI is inspired by the stock market’s Volatility Index.
CVI is already live on the mainnet, and users who want to participate can deposit Tether (USDT) to open positions or provide liquidity.
“The index enables traders to profit from market volatility by opening positions in anticipation of major movements in either direction. Users who expect volatility to increase can open a CVI position. If correct, they can take profit by selling their positions once the index has risen.”
The index will work in the opposite direction as well. If traders believe that the volatility will remain low, they can provide liquidity to the platform and profit by collecting fees paid by traders who have opened CVI positions.
The announcement further described the index as a “full-scale decentralized ecosystem that brings the popular ‘market fear index’ to the crypto market.”
COTI noted that users will also be able to connect the CVI index with their MetaMask or Trust Wallet accounts to manage their positions, provide liquidity, and deposit/withdraw funds.
Those who decide to provide liquidity need to deposit USDT for a minimum of 72 hours before receiving a share of the premiums collected by the pool. On the other hand, traders who have opened a position must maintain it for at least six hours before selling or closing it.
The index will work with its own native governance token called GOVI. The platform will enable users to stake the coin to earn fees and participate in voting. Token holders will also have a saying in determining which tradable assets are available on CVI, the allowed leverage, deposit amounts, and platform fees.
Future updates to the index include adding ETH and COTI as deposit tokens, more derivatives markets data sources, an advanced traders dashboard, margin trading, and an enhanced voting platform.