A number of venture capital giants have completed a round of funding for the Volmex Finance protocol on volatility and ether-based derivatives.
According to Volmex Labs’ announcement of 17 March, several leading companies in the field of decentralized risk capital financing contributed to the financial round, including Alameda Research, Three Arrows Capital, Robot Ventures, CMS Holdings, IOSG Ventures, D64 Ventures and Fourth Revolution Capital in addition to a number of other individual investors, including BarnBridge’s Tyler Ward. The amount received was not disclosed.
4RCapital co-founder Keegan Selby posted on Twitter:
“We are extremely excited to support Volmex Finance by introducing volatility indices, a key financial primitive in the global quarter-billion dollar derivatives market, to Decentralized Finance.”
The project, which was launched in December 2020, aims to bring volatility to Etherea, which will unlock a number of new DeFi applications and investment opportunities.
It launched an index designed to measure Etherea’s 30-day implicit volatility called the ETHV Index v1. It can be used in a similar way to the VIX Chicago Board Options Exchange, which provides an estimate of the short-term volatility of US stock markets.
When Ethereum market volatility is low, investors can buy futures or ETHV Index v1 calls and sell them when market volatility increases. The Volmex Finance team explained:
“Volatility derivatives are a fundamental pillar of modern financing because they provide a cost-effective means of hedging market volatility risk.”
In order to avoid costly fees associated with transactions in the Ethereum core network, it will use the protocol Optimization of the second layer scaling technology reduce and speed up the functions of index querying and future trading.
Optimism has recently been deployed on a number of DeFi platforms, including Synthetix, MakerDAOand is said to provide a benchmark for the highly anticipated version 3 of Uniswap.
Volmex also has a bitcoin derivative product called BTC Index v1, which allows traders to use the protocol to express a view of the expected volatility of the underlying asset.