HappyBlock AMA#7 ——volmex.finance
Volmex finance builds crypto volatility products. Currently volmex has built the Ethereum Volatility Index and Bitcoin Volatility Index, and is building a suite of crypto volatility products around the indices in general. Volmex finance is backed by leading crypto investment and trading firms including Three Arrows and Alameda Research.
1.Could you please introduce yourself and the team to our community?
My name is Cole Kennelly, and I am the Founder & CEO of Volmex Labs, where we are building a suite of crypto volatility products.
Quickly on my background. I’ve been in the crypto space since 2016, following ETH since this time, and joined the DeFi space early on in 2018. Back then I had met founders / core team from early DeFi projects. I was also the second employee and first business hire at Staked (now acquired by Kraken), and helped them grow their business a lot.
I’ve been an active trader in the crypto derivatives market and also have been following TradFi options for years through my dad who spent his career at tradfi options exchanges. So, in 2020 I had an idea and thought there should be a better way to speculate and hedge crypto volatility with a VIX-like crypto product, and started building the Volmex volatility index.
We are a product-focused team coming from companies including Staked, Consensys, Voyager, Fetch, and more! Volmex Labs is backed by leading crypto investment and trading firms, including Three Arrows and Alameda Research.
2.Now we are interested in the product you are building. What is Volmex Finance and what problems your team is determined to solve?
Volmex makes crypto volatility tradable. Traders can use Volmex crypto volatility products to speculate on crypto volatility and hedge crypto volatility. Liquidity providers can use the protocol to earn trading fees from providing liquidity.
We built the Volmex Ethereum Volatility Index and Volmex Bitcoin Volatility Index, which track the implied volatility of ETH and BTC, and are building a suite of crypto volatility products around the indices and generally.
Our first tradable product is Volmex volatility tokens. Volmex volatility introduces issuance and redemption of volatility tokens like ETHV, which, collateralized fungible ERC20 tokens which track the implied volatility of ETH and BTC directional.
There are two core buckets of protocol users for volatility tokens v1: Liquidity providers → Deposit DAI or USDC to mint volatility tokens and DEXsTraders → Buy / sell volatility tokens to speculate or hedge crypto market volatility.
More information in the docs: https://docs.volmex.finance/
3.Since the volatility is changing every moment, what oracle service is Volmex using and how does volatility Index change the price of ETHV and iETHV?
Volmex has a backend that calculates the Volmex volatility indices off-chain. You can view this data here: https://charts.volmex.finance/
Volmex volatility tokens v1 tokens are market-determined and do not require a regular oracle interaction. If a global settlement was triggered, the reference price would need to be entered into the system.
Volatility token v1 pricing is market determined and underpinned by the global settlement mechanism. More details on the volatility tokens v1 architecture / mechanism here: https://docs.volmex.finance/
Stay tuned for details on volatility tokens v2!
4.What are the use cases in Volmex Finance?And how it works?
Volmex products can be used to hedge or speculate on market volatility by going long / short. Volmex LPs can also earn trading fees with a fairly neutral strategy. Volmex indices are also an excellent indicator of market volatility and gauge of market sentiment.
As mentioned above, in volatility tokens v1, there are two core buckets of protocol users for volatility tokens v1: Liquidity providers → Deposit DAI or USDC to mint volatility tokens and DEXsTraders → Buy / sell volatility tokens to speculate or hedge crypto market volatility.
Small typo above. As mentioned above, there are two core buckets of protocol users for volatility tokens v1: Liquidity providers → Deposit DAI or USDC to mint volatility tokens and DEXsTraders → Buy / sell volatility tokens to speculate or hedge crypto market volatility.
For example, traders can buy ETHV or BTCV to hedge. If a trader buys ETHV when it’s at $105 and sells at $120, they profit and successfully hedge market volatility. The same can be done with IETHV, depending on the trader’s position.
5.Very cool, what blockchains does Volmex build on at the moment? What’s the road map and is there a plan to support more blockchains?
Currently, Volmex v1 is deployed and live on the Ethereum mainnet, Polygon, and Arbitrum. We are currently evaluating more chains and layer 2s to deploy for volatility tokens and new products!
6.Volmex Finance had some amazing fundraising rounds last year. Who are the backers and how will they help Volmex to grow continuously?
Volmex is backed by leading crypto trading and investment firms including Three Arrows Capital, Alameda Research, CMS Holdings, Orthogonal Trading, Robot Ventures, and more. You can view our partners on the Volmex homepage: https://volmex.finance/
Our partners work with us by providing product feedback, using the products, and ideating on new product ideas, among other things
7.Are there any competitors in the current market? What features or advantages does Volmex have to make sure it stands out?
The Volmex product suite (volatility tokens + several new crypto volatility products) is very differentiated. We do not think there is a DeFi / CeFi company or brand with the exact same offering / approach. We will continue to trailblaze and build innovative crypto volatility products. Given we are hyperfocused on crypto volatility products, we can move faster than others and invest more in this area.
1.How does his riskiness compare to options and contracts?
Crypto volatility products allow traders to capitalize on volatility or lack of volatility. This is different than normal futures or options. More info here: https://docs.volmex.finance/
2.What’s the source of volatility?
Volmex indices use 8 different options. More info on methodology here: https://docs.volmex.finance/indices/methodology
3.How can we test the product and what is the strengh of the product?
Volmex app: https://app.volmex.finance/
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