Report said that a number of venture capital giants have completed a financing round for Ethereum-based volatility and derivatives protocol Volmex Finance.
It has been reported by Volmex Labs that the financing round was contributed to by several leading decentralized finance venture capital firms including Alameda Research, Three Arrows Capital, Robot Ventures, CMS Holdings, IOSG Ventures, D64 Ventures, and Fourth Revolution Capital in addition to a number of individual angel investors including BarnBridge’s Tyler Ward.
However, the amount raised was undisclosed.
Keegan Selby, the co-founder of 4RCapital, said:
“Extremely excited to back Volmex Finance as they introduce volatility indices, a core financial primitive of the quadrillion dollar global derivatives market, to Decentralized Finance.”
The report said that the project, introduced in December 2020, aims to bring volatility hedging to Ethereum which will unlock a number of new DeFi applications and investment opportunities. It has launched an index designed to measure the 30-day implied volatility of Ethereum called the ETHV Index v1. It can be used in a similar way to the Chicago Board Options Exchange’s VIX which provides an estimate of short-term US stock market volatility.
DeFi volatility derivatives platform @volmexfinance has attracted funding from venture capital titans and high-profile angel investors. https://t.co/HNX17Gp7mi — Cointelegraph (@Cointelegraph) March 19, 2021
Likewise, when Ethereum market volatility is low, investors can buy ETHV Index v1 futures or calls, selling them when market volatility increases.
The team behind Volmex Finance explained:
“Volatility derivatives are a core pillar of modern finance, as they provide a cost-effective means for hedging market volatility risk.”
Thus, Volmex also has a Bitcoin-based derivative product called the BTC Index v1 whereby traders can leverage the protocol to express a view on the expected volatility of the underlying asset.