- CVI is an open-source DeFi protocol project backed by COTI.
- This project welcomes professor Dan Galai into its board of advisors.
- Prof. Galai will guide the CVI team in providing the protocol as the market standard.
Moreover, the CBOE Market Volatility Index is commonly known by its ticker VIX. In addition, it is often known as the “Fear Index,” which is a financial instrument tracking the real-time implied volatility of 30-day S&P 500 options.
More so, it was initially developed by Dan Galai and Menachem Brenner in a series of papers published after 1989. They envisioned creating a series of volatility indices for different asset classes, including stock markets, interest rates, and foreign exchange rates. In addition, the concept was later used by the Chicago Board Options Exchange in 1993.
Prof. Galai said,
“I’m looking forward to helping design advanced risk management tools for investors in this new, and often wild asset class…the CVI team has the knowledge and capability to put theory into practice and build a truly useful product in the cryptocurrency space.”
Prof. Dan Galai is Professor Emeritus of Finance and Business Administration at the Hebrew University in Jerusalem. Moreover, he is a world-renowned expert in risk management and financial derivatives. He also obtained a PhD in Business Administration at the University of Chicago.
More so, in his long career, he worked as a consultant to the Chicago Board Options Exchange and American Stock Exchange. Moreover, his academic career includes Visiting Professor of Finance positions at INSEAD, HEC Lausanne, UCLA, UC Berkeley, and others.
Even more, the Crypto Volatility Index tracks the implied volatility in the next thirty days of major Bitcoin and Ether options markets. More so, the implied volatility is a component of an option’s price representing the market’s expectation of future price movements for the underlying asset. Specifically, the high implied volatility suggests that the market believes a downturn is imminent, though the prediction does not always suit reality.
The CVI, in addition to providing an invaluable indicator for assessing trading and investment strategies, can also be traded directly. It provides an incredibly versatile tool for crypto traders. Moreover, the volatility index could be utilized to hedge other crypto positions against downturns or facilitate creative trading strategies based on market sentiment.
Furthermore, Crypto Volatility Index (CVI) is a revolutionary and first-of-its-kind decentralized VIX for the crypto market. Moreover, it allows users to hedge themselves against market volatility and impermanent loss. CVI is a full-scale decentralized ecosystem that offers the sophisticated and very popular “market fear index” into the crypto market. More so, it is created by computing a decentralized volatility index from cryptocurrency option prices, along with analyzing the market’s expectation of future volatility.
In contrast, COTI is a fully encompassing “Finance on the blockchain” ecosystem, specifically designed to meet the challenges of both Centralized Finance (CeFi) and Decentralized Finance (DeF) by introducing a new type of DAG based base protocol and infrastructure that is scalable, fast, private, inclusive, low cost and is optimized for finance. COTI develops CVI as an open-source, decentralized product offered by its users.
This article was first published on coinquora.com