Applicant Name: CVI
Project Name: CVI (Crypto volatility index)
CVI, the Crypto Volatility Index, is the first and only decentralized and fully operational ‘VIX’-like product exclusively tailored for the crypto market. It leverages Chainlink oracles to extract on-chain option prices for 30-day periods on BTC and ETH, and delivers a decentralized On-Chain volatility index, providing a reliable gauge of market sentiment and implied volatility. CVI serves as the premier platform for decentralized volatility trading in the cryptocurrency space. Our latest protocol updates introduce industry-standard features, real yield, leverage positions, a hedging solution to the Theta vault, and the thrilling UCVI index.
One of our flagship offerings, the Theta Vault, has proven not only profitable but also capable of providing real yield to liquidity providers. Our commitment to innovation and improvement is unwavering, and we believe that the forthcoming protocol updates will be pivotal in our quest to foster even more growth within the Arbitrum ecosystem.
Scheduled for release next month, these updates include:
New UCVI (Ultra CVI) - x3 Volatility Index! We’re introducing the new Ultra CVI, which will offer volatility traders a three-fold increase in volatility exposure. This expansion will diversify our product offerings and cater to a wider range of traders.
Hedging Feature for the Theta Vault: Our innovative hedging feature will enhance risk management for liquidity providers in the Theta Vault. This risk mitigation measure will lead to a substantial reduction in funding fees, making our platform even more attractive for traders.
Up to x16 Leverage: To meet the demands of advanced traders, we’re introducing leverage options of up to x16. This will empower traders to optimize their strategies and potentially amplify their returns.
Referral Program: We’re excited to unveil a referral program that will reward users for bringing new participants to the CVI ecosystem. This program aims to strengthen our community and encourage further growth (No $ARB incentives for this program).
Support for concentrated liquidity for the CVI and UCVI Volatility tokens by integrating with Uniswap v3 on Arbitrum
With these enhancements on the horizon, we anticipate a dramatic increase in the number of Theta Vault deposits and active traders on our platform. CVI.finance remains dedicated to providing innovative solutions for volatility trading while fostering a thriving community on the Arbitrum network and we would be delighted to receive this grant to help up achieving this.
Team Members and Qualifications:
Moshe Cohen, CEO - https://www.linkedin.com/in/moshe-cohen-53521a6a
Yoni Neeman, CINO - https://www.linkedin.com/in/yoni-neeman-64672247
Vlad, Backend engineer+smart contracts
Idan - smart contracts engineer
Anton - mathematician and researcher
David, Frontend engineer
Bar, Marketing lead
Tamir, Business development and partnerships
Lout, Community ambassador
Nick, Community moderator
Website URL: https://cvi.finance/
Twitter URL: https://twitter.com/official_CVI
Github URL: https://github.com/govi-dao/cvi-contracts
Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?: Yes
Requested Grant Size: 200,000 $ARB
Grant Matching: We are currently seeking a 200,000 ARB grant to enhance activity on the CVI platform. As part of our updated protocol, we are introducing $esGOVI incentives for active traders. Currently, liquidity providers are receiving incentives in the form of $esGOVI. If we are successful in obtaining the ARB grant, we will additionally incentivize both traders and liquidity providers with $ARB alongside the $esGOVI rewards.
- Incentivize Active Volatility Traders on the CVI Platform
Budget: 60% of 200,000 $ARB = 120,000 $ARB
These funds will be used to incentivize active traders participating in volatility trading on the CVI platform. This will include rewards, bonuses, or other incentives to encourage trading activity.
- Incentivize Liquidity Providers to the Theta Vault
Budget: 40% of 200,000 $ARB = 80,000 $ARB
These funds will be allocated to incentivize liquidity providers who contribute to the Theta Vault on the CVI platform. The aim is to attract and retain new liquidity providers to enhance the ecosystem and to allow a greater use to the protocol.
Funding Address Characteristics: GOVI Treasury (Gnosis multisig 2/4, keys securely stored on cold wallets)
Our primary objectives for this grant are as follows:
Increase TVL: We aim to significantly increase the TVL on the CVI platform on the Arbitrum network. By attracting more users and liquidity, we strive to enhance the stability and depth of the CVI ecosystem.
Boost Open Interest (OI): We intend to foster growth in OI, reflecting increased trading and investment activity on CVI. This growth will demonstrate the platform’s utility and attractiveness to traders and investors.
Key Performance Indicators (KPIs):
To measure the success of our grant objectives, we will track the following KPIs:
TVL Growth: We will measure the percentage increase in TVL on the CVI platform on Arbitrum before and after the grant implementation.
OI Increase: We will monitor the growth in open interest as a clear indication of increased trading activity.
User Participation: We will track the number of active volatility traders and liquidity providers on CVI, focusing on growth percentages.
How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:
Receiving this grant will enable us to significantly enhance the Arbitrum ecosystem by:
Attracting more users and liquidity to the CVI platform, thus increasing the overall activity and engagement on the network.
Demonstrating the viability and sustainability of decentralized volatility trading on Arbitrum.
Promoting the use of ARB tokens and fostering a stronger CVI community on Arbitrum, contributing to the network’s growth and security.
Justification for the size of the grant:
The grant size of 200,000 $ARB is justified by the necessity to effectively incentivize both traders and liquidity providers for the upcoming new CVI V4. These funds will play a pivotal role in achieving the desired growth in TVL and OI on Arbitrum.
- Developing a distribution mechanism for $ARB
- Implement a fair and transparent distribution mechanism for grant funds in $ARB, based on liquidity provided, open interest, and staking amounts.
Strategy: Develop a smart contract-based distribution model that calculates rewards based on specific criteria, ensuring equitable allocation among eligible participants.
- Wide Marketing Campaign
- Launch an extensive marketing campaign aimed at attracting active traders and LP providers to Arbitrum.
Strategy: Implement a multi-faceted marketing campaigns that encompasses social media, content marketing, partnerships, and targeted advertising to raise awareness about CVI and volatility trading, highlighting Arbitrum and its benefits.
- Risk Management
Implement robust risk management strategies to mitigate market volatility and smart contract risks. Create a safeguard mechanism to prevent user manipulation during the distribution process.
Strategy: Continuously assess and adapt risk management strategies to safeguard the ecosystem. Implement measures such as circuit breakers, auditing, and user verification to maintain security and fairness.
Anticipate a 2-month timeline for grant implementation, including execution and monitoring.
Strategy: Adhere to a structured timeline for each component of the grant allocation strategy, with regular monitoring and adjustments to ensure effectiveness and alignment with objectives.
The funds from the grant will be distributed over a 2-3 month period from the time we receive them. We will commence distribution one month after receiving the funds to allow for some development time for all the above functions that require development.
Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream? Yes
Is the Protocol Native to Arbitrum?: No, but Arbitrum is the main chain of Activity for CVI. In addition, the transition of the GOVI community to Arbitrum has occurred over two years ago with the launch of GOVI staking v2. Arbitrum is also the only chain where CVI trading is live.
On what other networks is the protocol deployed?: ZKsync
What date did you deploy on Arbitrum?: Jan-04-2022
Our Theta vault is a profitable product, and we anticipate a huge spike when implementing the above new features to the protocol -
Status update and additions to the roadmap - https://cviofficial.medium.com/cvi-management-status-update-d18aba90fa66
Is your team prepared to create Dune Dashboards for your incentive program?: Yes
Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes, we will create a dashboard for it.
Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: