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The decentralized finance (defi) platform cvx.finance has launched the beta version of its \u201cCrypto Volatility Index\u201d, otherwise known as the \u201cCVX.\u201d The CVX is an index similar to the \u201cMarket Fear Index\u201d (VIX) commonly used in traditional finance, but cvx.finance measures the suggestive volatility from bitcoin and ethereum options markets.<\/strong><\/p>\n It\u2019s still early but a new product has been launched that may be able to give cryptocurrency traders a rough idea of how the crypto market is feeling and if traders expect future price fluctuations.<\/p>\n The new service is a beta product produced by the cvx.finance platform and the creators claim the application is a decentralized version of VIX. The VIX is commonly used in traditional finance markets because it allows traders to hedge or to take profit from market volatility.<\/p>\n Basically, the CBOE Volatility Index (VIX) measures the market volatility of the S&P 500 Index options during the course of a 30-day timespan. Traders call the VIX a \u201cfear index\u201d and the index is calculated in real-time via CBOE\u2019s exchange engine.<\/p>\n For instance, the higher the VIX is it means the S&P 500 is expected to decline and if the VIX drops then traders expect the S&P 500 index to remain relatively stable. The cvx.finance CVX refers to the crypto economy\u2019s \u201cCrypto Volatility Index\u201d by measuring implied volatility via ethereum (ETH<\/a>) and bitcoin (BTC<\/a>) options markets.<\/p>\n The CVX developers detail that the project leverages a Black-Scholes option pricing model that is integrated with crypto market conditions. The project uses \u201cChainlink architecture with multiple oracles to retrieve the required data and calculate the formulated CVX using external adapters.\u201d<\/p>\n Then the calculated results from each oracle are \u201caggregated, verified, and passed to the blockchain node so that the data can be accessed and used both by the requesting smart contract and as a service for other use case implementations.\u201d<\/p>\n The Crypto Volatility Index creators stress:<\/p>\n The combined CVX index is a weighted sum of CVX indices calculated for several cryptocurrencies (for example BTC<\/a> and ETH<\/a>), where weights are based on the currency market cap. <\/strong><\/em><\/p>\n<\/blockquote>\n At the time of publication, the CVX is awfully high and the previous hour saw a measurement of around 72.15.<\/p>\n Last week, the CVX saw a high of 72.4 and a low of 60.28, which shows that traders seem to be fearful of increased volatility judging by the CVX. Since the start of the CVX\u2019s measurements of implied volatility, it seems like there\u2019s a direct inverse correlation between bitcoin\u2019s (BTC<\/a>) spot market prices and the CVX index.<\/p>\n Another index, hosted on the web portal alternative.me<\/a> called the \u201cCrypto Fear & Greed Index\u201d (CFGI) is a plot of the fear and greed index over time.<\/p>\n \u201cA value of 0 means \u2018extreme fear,\u2019 while a value of 100 represents \u2018extreme greed,\u2019 according to the web portal\u2019s index description. Currently, the CFGI is beyond \u201cfear\u201d at the moment and the metric is in the \u201cgreed\u201d zone with a value of around 71.<\/p>\n What do you think about the CVX index? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n The post Defi Index CVX Measures Crypto \u2018Market Fear\u2019 and Implied Volatility<\/a> appeared first on Bitcoin News<\/a>.<\/p>\n![\"CVX](\"https:\/\/www.cryptocabaret.com\/wp-content\/uploads\/2020\/11\/cvx3000.jpg\" "\\"CVX")
\u201cWe have created CVX so that traders can hedge themselves against volatility or lack thereof,\u201d explains the CVX documentation. \u201cCVX is a full-scale decentralized ecosystem that brings the sophisticated and very popular \u2018market fear index\u2019 to the crypto market and is created by computing a decentralized volatility index from cryptocurrency option prices together with analyzing the market\u2019s expectation of future volatility.\u201d<\/p>\n\n