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Crypto Volatility Index Incorporates Chainlink Keepers

Cryptocurrency Oct 07, 2021 12:30PM ET
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Crypto Volatility Index Incorporates Chainlink Keepers

  • CVI integrates Chainlink Keepers.
  • To expand the utility of CVI, ETHVOL token was built.
  • CVI is set to launch the next Volatility token — CVIVOL.

The Crypto Volatility Index (CVI) — a protocol tracking the 30-day implied volatility of Bitcoin and Ethereum announces that they have incorporated Chainlink Keeper to automate the maintenance of tokens pegged to their Volatility indices.

Chainlink Keeper was integrated due to its decentralized network run by the same time-tested and professional DevOps teams powering Chainlink Price Feeds. As a result, tens of billions of dollars in value are secured for hundreds of applicants across the various blockchain.

From the diagram above, CVI registers a Chainlink Keeper to trigger token rebase. Chainlink Keepers continually monitor the time, calling the CVI’s smart contract when it reaches midnight UTC time. Here, CVI’s smart contract verifies that the time conditions have been met. Thus, CVI’s smart contract automatically executes a token release without any manual input.

All in all, every time a rebase is needed, an entity needs to call the smart contract on-chain to trigger the rebase function to run. Rebases are paid for by funding fees that then get redistributed to users based on them having a long or short position during the rebase.

Essentially, Chainlink Keepers perform the secure off-chain computation to check for predefined conditions and then call on-chain functions when those conditions are found to occur. Chainlink Keepers are optimized for low costs and decentralized security to prevent single points of failure. This process makes it an ideal trust-minimized solution to keep the Volatility tokens reflective of the current market volatility.

The Crypto Volatility Index (CVI) is a VIX for crypto, created by the COTI team in a measure to build a market fear index for the crypto market. In essence, CVI is designed to identify the market’s expectation of future volatility in the period of 30 days.

In order to expand the functionalities of CVI, the first volatility token — ETHVOL was launched. The ETHVOL token is pegged to the Ethereum Volatility Index which grants users exposure to crypto volatility. To maintain the peg, a rebasing mechanism is used each time a rebase is triggered. In turn, users receive more or less ETHVOL tokens directly in the wallet based on the change in Ethereum Volatility Index from the previous rebase.

Most excitingly, CVI is set to launch the next Volatility token — CVIVOL. The CVIVOL token will be traded on any Polygon-supported DEXs.

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Crypto Volatility Index Incorporates Chainlink Keepers
 

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Aung Khant
Aung Khant Oct 07, 2021 12:48PM ET
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