COTI has opted to use a Chainlink-based system as its oracle The CVI index is designed to expand the landscape of trading and hedging options available within the cryptocurrency marketplace. Crypto Volatility Index The Crypto Volatility Index (CVI) is designed to assess the fluctuations in the value of significant digital tokens.
In the latest update, COTI announced that it has chosen Chainlink to both decentralize the gathering of market data for the CVI and to ensure data distribution across the decentralized finance (DeFi) ecosystem.
As a proven oracle framework, Chainlink is expected to bolster CVI's reputation as a credible source for insights into the volatile movements in the cryptocurrency market.
COTI Created the First CVI
COTI's CVI, akin to a 'fear index', estimates the odds of significant market declines over the next month. It emulates the VIX in the U.S. stock market, suggesting CVI's potential popularity among crypto traders.
A volatility index serves as a foundation for constructing hedging derivatives, a crucial instrument many professional crypto investors have not had access to until now.
Through the creation of a comprehensive hedging tool, CVI aims to pave the way for a new domain within crypto volatility futures, facilitating seamless smart contract integration within DeFi.
A Solid Metric
The adoption of Chainlink was due to its ability to synthesize multiple off-chain data inputs into an on-chain format, making CVI data readily usable in the DeFi world.
Utilizing Chainlink External Adapters, the system links off-chain data sources with Chainlink nodes via purpose-built smart contracts driven by specific instructions.
Put simply, this approach ensures access to top-tier data globally, tapping into numerous sources for a precise reflection of market dynamics found in CVI.
Beyond its technical prowess, the Chainlink network is managed by respected teams in the crypto arena, strengthening CVI's framework for becoming an authoritative industry resource.
Volatility metrics are invaluable across markets, spawning new trading instruments, as algorithmic strategies often hinge upon these volatility assessments.
Signs of a Maturing Market
The CVI's imminent introduction marks a significant milestone in crypto's brief yet rapid evolution, comparable to developments like the VIX that took far longer to materialize.
The introduction of CVI-based trading tools is likely to be well-received by professional investors, especially given its open data sharing capacity with both crypto exchanges and traditional financial institutions.
The unveiling of the CVI signifies that cryptocurrencies are securing their place at the forefront of financial innovations, promising continued growth in interest and application.
CVI’s Beta is already accessible for viewing. clicking here .
To dive deeper into COTI's initiatives and other innovative projects in the pipeline, you may explore further. click here to visit the company’s website.
