Through a press release on Oct. 27, Crypto Volatility Index (CVI) announced that it had integrated Chainlink keepers to automate the supply rebase of tokens pegged to its volatility indices.
According to the announcement, the Chainlink Keepers will specifically help in the automation of the supply rebase process of CVI Volatility tokens. The rebase will be set to automatically take place every day at midnight. This will eliminate the need for manual input to constantly maintain its peg.
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The choice for Chainlink Keepers was informed by the fact that it is run by the same team behind the Chainlink Price Feeds, which has helped many blockchain applications secure tens of billions of dollars.
The press release read:
“We decided to integrate Chainlink Keepers because it is a decentralized network run by the same time-tested and professional DevOps teams powering Chainlink Price Feeds, which help secure tens of billions of dollars in value for hundreds of applications across numerous blockchains. Chainlink Keepers are optimized for low costs and decentralized security to avoid single points of failure, making it an ideal trust-minimized solution to keep the Volatility tokens reflective of current market volatility.”
The move will make CVI fully automated
The CVI, which is created by the COTI team, aims at creating a “market fear index” for the cryptocurrency market.
Besides being backed by extensive research, the CVI is also backed by industry experts in the financial markets like the original VIX creator.
It is designed to determine the speculation of the future market volatility in the next 30 days. It does so by calculating a decentralized volatility index using several inputs like crypto option prices.
The team explains in the Press release that:
“It is created by computing a decentralized volatility index using cryptocurrency option prices, employing the popular Black-Scholes option pricing model while adapting it to the current crypto-market conditions.”
First use case of CVI
The team also disclosed that they have already launched the first CVI volatility token called ETHVOL.
ETHVOL is a volatility token pegged on the Ethereum volatility index enabling investors to also invest in cryptocurrency volatility besides the actual cryptocurrencies.
So, according to the automated rebasing mechanism, every time a rebase occurs ETHVOL users “will receive more or less ETHVOL tokens directly in their wallets based on the change in Ethereum Volatility Index.” The team also announced that the next volatility token to be launched will be CVIVOL, which will be pegged on the volatility index of CVI. The CVIVOL is expected to be traded on any decentralized exchange (DEX) supported on Polygon.
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