Numerous enterprise capital giants have accomplished a financing spherical for Ethereum-based volatility and derivatives protocol Volmex Finance.
In keeping with a March 17 announcement from Volmex Labs, the financing spherical was contributed to by a number of main decentralized finance enterprise capital corporations together with Alameda Research, Three Arrows Capital, Robotic Ventures, CMS Holdings, IOSG Ventures, D64 Ventures, and Fourth Revolution Capital along with a lot of particular person angel buyers together with BarnBridge’s Tyler Ward. The quantity raised was undisclosed.
4RCapital co-founder Keegan Selby posted on Twitter:
“Extraordinarily excited to again Volmex Finance as they introduce volatility indices, a core monetary primitive of the quadrillion greenback international derivatives market, to Decentralized Finance.”
The challenge, launched in December 2020, goals to convey volatility hedging to Ethereum which can unlock a lot of new DeFi purposes and funding alternatives.
It has launched an index designed to measure the 30-day implied volatility of Ethereum referred to as the ETHV Index v1. It may be utilized in the same strategy to the Chicago Board Choices Alternate’s VIX which offers an estimate of short-term U.S. inventory market volatility.
When Ethereum market volatility is low, buyers can purchase ETHV Index v1 futures or calls, promoting them when market volatility will increase. The staff behind Volmex Finance defined:
“Volatility derivatives are a core pillar of contemporary finance, as they supply a cheap means for hedging market volatility threat.”
With a view to keep away from the costly charges related to transacting on the primary Ethereum community, the protocol will leverage Optimism layer-two scaling technology to make index querying and future buying and selling performance cheaper and quicker.
Optimism has been deployed on a lot of DeFi platforms just lately together with Synthetix, MakerDAO, and it’s rumored to supply the scaling for Uniswap’s extremely anticipated model 3.
Volmex additionally has a Bitcoin-based spinoff product referred to as the BTC Index v1 whereby merchants can leverage the protocol to specific a view on the anticipated volatility of the underlying asset.