Feb 18
Moret volatility tokens
Moret has launched two sets of volatility tokens, all ERC20-based on Polygon chain, whose values are linked to the actual volatilities of ETH and BTC over periods of 1 day, 7 days and 30 days. These tokens are ETH1, ETH7, ETH30 as well as BTC1, BTC7, BTC30.
Anyone can buy and sell these tokens on Moret website based on the volatility values provided by Moret volatility oracle. The prices for these tokens are adjusted according to the ratio between the amount of purchase/sell and the total values locked in the liquidity pools.
These volatility tokens stabilise their values around the volatility levels via arbitrage mechanism in which these tokens could be exchanged for at-the-money options on Moret. For example, if the values of volatility tokens are high relative to market prices or expected volatilities, anyone can sell options at Moret for volatility tokens and, in turn, sell these tokens for higher values.
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