[ CVEX News | Updates from the CVEX ecosystem ]

CVEX Insights

Product
5 min read
DeFi Wasn’t Ready for Institutional Trading — Until Now

Institutions don’t want gimmicks. They want low-latency execution, verifiable fairness, and crash-proof infrastructure. CVEX is building exactly that.

At first glance, all DeFi exchanges are similar. They all have bright interfaces, stock exchange glasses, charts, and a couple of “Buy” and “Sell” buttons. And the illusion is created as if the main thing has already been solved. But in reality, the deeper you look, the more it becomes clear: the beautiful interface is a showcase. And the real complexity is hidden in the backend.

After all, what makes an exchange a real infrastructure you can trust? Not buttons. Not tokens. It's the ability to ensure that every transaction actually happens and no one runs away with the money. That's what's called clearing. This is an invisible but critical process that checks, blocks, recalculates, and finalizes every position.

What is Clearing?
Clearing is the process that guarantees the execution of trades. It calculates how much you owe or receive, checks whether you have enough collateral, and locks up the right amounts. All this happens before and after each transaction so that there are no “forgotten debts” or “missing” counterparties.

Most DeFi platforms try to impress by showing off new features or gamification. But institutional participants look deeper: Can they trust the platform with millions of dollars, knowing that everything works predictably and smoothly?

At CVEX, we started with the hardest part, and we've already solved the clearing problem. Now we are moving on to the next height: high-speed order matching. 


Why the Matching Engine Is the Key

A good stock exchange is like an orchestra. Someone has to conduct it so that all the notes sound in time. In the world of trading, this role is played by the order matching engine. It decides who trades with whom, at what price, and at what moment. Does that sound simple? In reality, one of the most complex engineering tasks in the industry.

For many years, there was a classic compromise: if you want speed, go to centralized systems; if you want transparency, sacrifice speed. Centralized engines (like on large CEXs) run in fractions of a second, but inside is a black box. How exactly do they make decisions? Why did order A execute before order B? There's no way to know. And frankly, they don't owe anyone an explanation.

On the other hand, decentralized exchanges give full transparency, but everything slows down. Every order goes through a blockchain where time is measured in slots and gas, not milliseconds. The result is slow, inconvenient, and almost unusable for algorithmic trading.

Our goal is to break this opposition. We're building an engine that gives you speed like CEX and confidence like DEX. Or as we call it, “CEX performance with DEX trust”. Fast, honest, verifiable. Not the illusion of decentralization is real.

CEX vs. DEX vs. CVEX — Comparative Table:

Feature Centralized Exchange Typical DEX CVEX
Matching Speed High (~0.1s) Low (~1–3s) High
Verifi Ability Low High High
Latency Transparency Opaque Clear Clear
On-chain Auditability None Partial Full

For institutional players, it's not just nice to have. They won't bet millions on a system where they have to either wait three blocks for confirmation or trust in the honesty of some Amazon server. They want to see how the mechanism works and be sure that it won't fail at the right moment.


How to Build a Fast and Honest Matching Engine

When people talk about speed in trading, they often picture lightning-fast charts and shouts of “faster, faster!” in a hedge fund office. But in reality, it's not the external entourage that decides everything, but what happens in the machine's memory—yes, right in the RAM.

Our matching engine works the same way as the traditional market leaders Eurex, NASDAQ, and CME. All orders are stored and processed directly in RAM. It's called RAM-based CLOB (Central Limit Order Book), and it's the industry standard for speed.

Why is this important? Because the disk is slow. Even the fastest SSD can't compare to reading from RAM. When the market is moving, every millisecond counts. One glitch and you're no longer first in line. The algorithm misses, the trade fails, the trader is not happy, and you lose your reputation (and money).

The basis of the CVEX architecture:

  • Memory instead of disk: All order data in RAM. No latency to write or read from disk.
  • Target: 200k-300k events per second, like Eurex. This is not a fantasy, but an industry benchmark.
  • Low-level implementation: C++ or Rust. No frameworks, maximum control over performance.
  • Parallelism: The architecture is sharpened for multithreaded processing. All processor cores work on the result.
  • Classic logic: Price and time priority, but with a performance that can withstand the load of pro-algorithm trading.

We don't just process orders quickly; we do it in such a way that no data stream becomes a bottleneck. There are no unnecessary layers. There is just speed, reliability, and predictability. Because serious market participants require engineering, not magic.


How to Be Fast but Trustworthy

Speed is a good thing. But in the world of crypto, “everything is fast” is not enough. The question any serious user will ask is, “How do I know you're not cheating?”

And it's a perfectly reasonable one. If the matching engine works outside the blockchain, where evidence is not published instantly, why should users believe it? The answer is simple: they shouldn't. And they won't. So we are building a system where believing is not necessary to verify.

We use a hybrid verification architecture that combines two approaches:

  1. Zero-knowledge proofs (zk-proofs): our engine regularly publishes on the blockchain a cryptographic proof that all matches were correct, without having to show each individual order.
  2. Optimistic verification: To increase speed, instead of waiting for proof for each action, we publish the result immediately and assume it is correct. But! If someone notices a mistake or an attempt to cheat, they can submit fraud proof, and the protocol will cancel the unfair result.

And now here's the best part: CVEX can use both approaches simultaneously.

First, instant publication of the result for fast trading. And then quietly confirming it via zk proof to record it with full confidence.

The bottom line?

  1. You get the speed of CEX.
  2. You get the transparency of DEX.
  3. No trades are left in a “black box”.

We don't ask you to trust. We just leave a trail for you to check everything.


Institutional Level Without Compromise

At some point, talk of TPS, fault tolerance, and risk management starts to sound like background. Especially for those who have already run exchanges, traded on the CME, and know what real infrastructure means. Let's save time and go over what's really important and what CVEX has already implemented:

  • No “2 million TPS” on paper. We don't engage in a marketing carnival with fabulous numbers. Instead, honest benchmarks. StarkEx has 9,000 transactions per second in the lab, about 40 per market in production. We're aiming for 100,000 confirmed and verified transactions per second, taking into account all on-chain limitations. Because what matters is not how many you can send, but how many you can actually fulfill.
  • No points of failure. We have a cluster of consensus engines. One node goes down, another one picks it up. There are redundant sequences. There are on-chain checkpoints. Even in a worst-case scenario, everything can be restored to the last confirmed state. You don't have assets stuck “in the server's RAM” because the server is no longer responding. Everything is backed up on the chain.
  • KYB pools and credit slots. We get it: not everyone wants to trade against an anonymous “ape420.eth”. That's why the tiered order book: shared for everyone, nested only for verified participants. Want to know who you're trading with? Choose a KYB pool. What's more, you can guarantee other participants' trades by acting as a credit provider through a smart contract. Welcome to on-chain prime brokerage.
  • Stock exchange risk management level: Automatic circuit breakers if the market is flying into the abyss; human oversight in case of bugs or Oracle glitches; and attention to the auction reopening after a shutdown. Not just “turn it back on” and watch the chaos, but collect all bids and set a fair price to restart.
  • No fake reward mechanics. We do not reward wash trading. We do not incentivize the race for fake volumes. Only real liquidity: tight spreads, depth, live orders. All metrics are public, on blockchain or via API. Want a reward? Provide real market value. Want to screw volume with yourself? Walk by.

If you're institutional, you're not looking for a platform that looks pretty. You're looking for one where nothing falls apart at the moment. Where everything is verifiable. Where trades are closed by the rules, not by agreement. Where you don't have to take your word for it because you can look at the code.

CVEX is built to be just such an exchange, without compromise, with engineering you can trust, and with architecture neither you nor we will be ashamed of.


Wrapping Up

In a marketplace where a new exchange pops up every week with a new token, neon-gradient banding, and the promise of a “revolution,” it's easy to lose your bearings. Everyone talks about innovation, but few do the infrastructure, and even fewer do it right.

Institutional players don't fall for animated graphics. They don't want a token that supposedly “redefines liquidity.” They need a platform where orders are executed quickly, risks are controlled fairly, and all processes can be checked without human intervention.

CVEX is just such a platform.

  1. Speed that can be measured. Not “almost instantaneous” but with clear metrics for latency and throughput.
  2. Security that can be replicated. There are no promises, but a mechanism with reserves, auditing, and on-chain checkpoints.
  3. Motivation that works. Not rewards for trading into the void, but rewards for liquidity useful to the market.

This is not a toy exchange. It's a serious bid for what DeFi should be if it wants to move beyond speculation and become a real part of the global financial infrastructure.

We're not just trying to catch up with TradFi. We are rewriting the rules with open-source, transparent logic and engineering that can withstand any market conditions.

DeFi you can trust, that's where we're going. And now you know exactly how.

Follow CVEX for news and crypto information

Top 3 articles

View all
5 min read
About Crypto ETFs

At CVEX, a leading decentralised derivatives exchange, we're here to demystify the concept of Crypto ETFs (Exchange-Traded Funds) and their pivotal role in the broader financial ecosystem. 

This article will delve into the fundamentals of Crypto ETFs, offering you insights into various types, how they operate, and the pros and cons of integrating them into your investment portfolio. As the bridge between traditional investment mechanisms and the dynamic realm of cryptocurrencies, Crypto ETFs provide a structured gateway for investors to gain exposure to digital assets without the complexities of direct trading. 

Whether you're a seasoned investor or new to the cryptocurrency scene, understanding Crypto ETFs will enhance your trading strategies and decision-making on platforms like CVEX. Join us as we explore the potential and intricacies of Crypto ETFs in the modern investment landscape.

What Are Crypto ETFs?

Crypto ETFs, or cryptocurrency exchange-traded funds, serve as a bridge for traditional investors to enter the world of digital assets without the complexity of managing cryptocurrencies directly. These financial instruments are designed to track the performance of one or more digital currencies or related technologies, such as blockchain, by being traded on conventional stock exchanges like any other ETF.

Essentially, Crypto ETFs allow investors to buy shares in a fund that represents an investment in cryptocurrencies. This method provides exposure to the crypto market's potential gains while mitigating the risks and technical challenges associated with setting up digital wallets and securing private keys. Investors can thus participate in the potential growth of digital assets through a familiar investment vehicle, without needing to engage directly with the underlying technology.

Crypto ETFs blend traditional investment strategies with access to emerging technologies, offering a straightforward and less daunting entry point into the crypto space.

Types of Crypto ETFs

Crypto ETFs come in various forms, each catering to different aspects of the cryptocurrency and blockchain landscape. Here’s a breakdown of the most common types:

  • Bitcoin ETFs. These ETFs are primarily focused on tracking the price of Bitcoin, the leading cryptocurrency by market capitalisation. An example is the ProShares Bitcoin Strategy ETF (BITO), which mirrors the performance of Bitcoin through futures contracts rather than direct ownership of the digital currency.

  • Ethereum ETFs. Similar to Bitcoin ETFs but centered around Ethereum, these funds aim to mirror the movements of Ether. Although direct Ethereum ETFs are not yet available on major U.S. exchanges, products like the Grayscale Ethereum Trust (ETHE) offer similar exposure through a fund structure.

  • Blockchain ETFs. These funds invest in a portfolio of companies actively involved in developing and implementing blockchain technologies. The Amplify Transformational Data Sharing ETF (BLOK) is a notable example, providing investors with exposure to the blockchain sector beyond just cryptocurrencies.

  • Bitcoin Miner ETFs. Targeting the mining sector of the Bitcoin ecosystem, these ETFs invest in companies that produce bitcoins through the mining process. The Valkyrie Bitcoin Miners ETF (WGMI) is an example, focusing on firms that generate revenue through mining activities.

The regulatory environment, especially for spot Bitcoin ETFs, remains a complex and evolving area. While futures-based Bitcoin ETFs have been approved, the U.S. Securities and Exchange Commission (SEC) has been cautious with spot Bitcoin ETFs, which would hold actual bitcoins rather than derivatives. The approval process has been stringent due to concerns over market manipulation and the lack of surveillance-sharing agreements with major cryptocurrency exchanges.

Comparative Table of Crypto ETF Types:

How Crypto ETFs Work?

Crypto ETFs provide investors with a pathway to participate in the cryptocurrency market without direct ownership of digital assets. These ETFs are structured to hold cryptocurrencies directly (spot ETFs) or use financial instruments like futures contracts to emulate the price movements of cryptocurrencies (futures-based ETFs).

Spot ETFs directly purchase and hold the cryptocurrency, allowing the ETF's performance to closely mirror the actual price movements of the digital asset it represents. In contrast, futures-based ETFs invest in futures contracts that speculate on the future price of cryptocurrencies, potentially introducing some deviation due to factors like roll costs and contango.

Investors can buy and sell shares of Crypto ETFs just like any other stock through traditional exchanges during regular trading hours. This process simplifies access to the volatile crypto market, providing a familiar, regulated framework for traditional investors to gain exposure to digital currencies.

Pros and Cons of Investing in Crypto ETFs

Investing in Crypto ETFs offers several advantages and disadvantages that investors should consider:

Advantages:

  1. Accessibility: Crypto ETFs simplify entry into the cryptocurrency market via traditional brokerage accounts, avoiding the complexities of crypto wallets and exchanges.
  2. Diversification: These ETFs often hold multiple cryptocurrencies or related securities, spreading risk across various assets.
  3. Liquidity: Traded on major stock exchanges, Crypto ETFs offer high liquidity compared to direct cryptocurrency transactions.
  4. Risk Mitigation: Investors are not required to handle security concerns like private key management, reducing the risk of theft or loss.

Disadvantages:

  1. Tracking Error: The performance of Crypto ETFs may not exactly match the underlying assets due to management fees or the mechanics of futures contracts.
  2. Counterparty Risk: Using derivatives introduces risks if the other party defaults on the contract.
  3. Regulatory Uncertainties: The evolving legal landscape can impact ETF performance and availability.
  4. Market Volatility: Cryptocurrency markets are notoriously volatile, affecting ETF valuations rapidly.

These factors make Crypto ETFs a compelling yet complex investment choice for those looking to diversify into digital assets with a traditional investment feel.

Crypto Trading or Crypto ETFs?

Investing in Crypto ETFs versus directly owning cryptocurrencies presents distinct differences, each appealing based on the investor's comfort with risk and desire for involvement in asset management.

Crypto ETFs provide a simplified, less hands-on approach to cryptocurrency investment. They offer traditional market trading hours in regulated environments and avoid the technicalities of cryptocurrency storage and security. This makes them an attractive option for traditional investors seeking exposure to crypto without the complexities of direct management.

Direct Crypto Investments involve purchasing cryptocurrencies like Bitcoin or Ethereum directly through exchanges. This method allows for 24/7 trading and potentially lower fees. It also offers excitement and deeper engagement in actively participating in the crypto market, including using platforms like CVEX for trading futures. It can be more thrilling and rewarding for those familiar with such environments.

Choosing between ETFs and direct investments often comes down to personal preference for involvement level, risk tolerance, and interest in the technology behind cryptocurrencies.

Wrapping Up

Crypto ETFs stand as a pivotal innovation, offering a bridge for traditional investors to enter the dynamic realm of cryptocurrency without the direct risks and complexities of managing digital assets. Whether opting for the regulated simplicity of ETFs or the direct engagement of owning cryptocurrencies, investors have diverse pathways to participate in the crypto economy. 

As the landscape evolves, both methods will continue to offer unique benefits and challenges, making it crucial for investors to stay informed and consider their investment strategies carefully in this fast-moving market.

5 min read
Who Is CVEX Protocol Owner?

At the heart of our trading platform is the CVEX Protocol, which ensures everything from trade execution to security is handled seamlessly. This protocol is crucial because it not only manages the current operations efficiently but also sets the stage for each trader's active participation in the platform's future through the DAO.

What is the CVEX Protocol?

The CVEX Protocol serves as the foundational framework of our platform, managing all key functions necessary for its operation. Built on the Arbitrum blockchain, it leverages cutting-edge technology to ensure transactions are both swift and secure. The protocol oversees various critical functions such as validating trades, securing transactions, and managing the digital wallets where assets are stored. Its design is focused on ensuring that the platform remains robust and responsive to the needs of its users.

Who is the Protocol Owner, and What is the DAO's Role?

Initially, the protocol is managed by the CVEX core team, who are responsible for setting it up and ensuring it functions as intended. Their role is pivotal in the early stages as they handle everything from routine updates to major strategic decisions.

However, the ultimate goal is for the platform to evolve into a system governed by its users through a Decentralised Autonomous Organisation (DAO). The DAO will enable traders like you to vote on significant aspects of the platform, from feature updates to financial strategies. This shift is not just about transferring power but about creating a truly democratic trading environment where every user’s voice can directly influence the protocol’s development and refinement.

Responsibilities of the Protocol Owner

Before the full transition to DAO governance, the Protocol Owner is tasked with several crucial responsibilities:

  • Configuring the Protocol. This includes setting the operational parameters of the platform, such as how trades are executed and how fees are handled.
  • Managing Funds. They oversee the protocol’s finances, ensuring that there are adequate funds for its operation and growth, which includes managing the fees collected and funding necessary upgrades or expansions.
  • Updating the Protocol. Technology and market conditions evolve, and so must the protocol. The owner is responsible for implementing software updates that enhance functionality and security.
  • Handling Emergencies. In case of a major disruption or security threat, the owner has the authority to halt operations to protect users’ assets and the platform's integrity.

Conclusion

The CVEX Protocol is integral to the functionality and security of our trading platform. With the upcoming transition to a DAO system, each trader will soon have the opportunity to shape the protocol’s future. This not only ensures that our platform stays at the cutting edge of technological advancements but also fosters a community-driven approach where your input and vote genuinely matter. 

Get ready to take a more active role in governing the ecosystem that supports your trading activities. This is your chance to influence the decisions that will define the landscape of decentralised finance.

5 min read
The Role of Fundamental Analysis in Crypto Trading

Fundamental analysis in crypto trading is the meticulous assessment of digital assets beyond mere price trends. It delves into project fundamentals, technology, and market demand to gauge the intrinsic value of a cryptocurrency. 

This analytical approach contrasts with technical analysis, which focuses on price movements and market patterns to time trades. Both methodologies are crucial in developing robust investment strategies, but fundamental analysis offers a deeper understanding of what drives value in the crypto space, empowering investors to make well-informed decisions grounded in the broader economic and regulatory environment.

Key Takeaways:

  • Fundamental analysis offers a deeper insight into the true value of cryptocurrencies beyond surface-level price movements.
  • It assesses various aspects including project fundamentals, technology, tokenomics, and the regulatory stance, providing a holistic view.
  • By understanding the strengths and vulnerabilities of a project, investors can better manage and mitigate potential risks.
  • Empowered with thorough analysis, investors can make more strategic and informed investment decisions, aligning with long-term goals in the volatile crypto market.

The Basics of Crypto Fundamental Analysis

Fundamental analysis in crypto trading involves a thorough examination of several core aspects of a project to determine its potential long-term success and inherent value. Here’s a breakdown of key concepts essential for conducting fundamental analysis:

  • Whitepaper — This document is the blueprint of a cryptocurrency project, detailing the technical specifics, the problem it aims to solve, and how it plans to do so. A well-articulated whitepaper provides insight into the project’s innovation and feasibility.
  • Roadmap — The roadmap outlines the project’s goals and the timeline for achieving them. It is a progress tracker and can indicate the project's commitment and long-term planning. Consistent milestone achievements are a positive sign of a team’s dedication and capability.
  • Technology — Underpins the entire project, where the uniqueness and security of the underlying blockchain technology are assessed. Scalability, transaction speed, and consensus mechanism are critical factors that can affect a project’s adoption and sustainability.
  • Project’s Fundamentals — This encompasses the overall vision, the team’s expertise, developmental progress, and the actual use case of the cryptocurrency. It looks at how well the project addresses a real-world problem and its potential to disrupt or improve existing systems.

Understanding these concepts is pivotal in assessing a crypto project's strength and potential. Fundamental analysis not only highlights the opportunities but also helps identify risks, making it an indispensable part of crafting sound investment strategies in the volatile world of crypto trading.

Economic and Market Factors

Understanding the economic and market factors through fundamental analysis is critical. Here are the key aspects to consider:

Tokenomics

This refers to the economic model of the cryptocurrency, including its supply mechanism, distribution schedule, and any mechanisms for reducing supply (like burning or staking). Effective tokenomics can incentivise behavior that supports the project's long-term viability and price stability.

Funding and Financial Health

Analysing a project's funding sources and financial sustainability is essential. Projects with robust funding from credible investors or through successful initial coin offerings (ICOs) demonstrate financial health and resource availability for sustained development.

Market Dynamics and Adoption Rates

It’s crucial to evaluate how a cryptocurrency fits into the broader market. This includes understanding current and projected demand, user adoption rates, and transaction volumes. A crypto that is gaining traction and showing increasing adoption may present a favorable long-term outlook.

Competitive Analysis

Assessing the cryptocurrency's position relative to its competitors helps identify its unique value proposition. A crypto that offers distinct technological advantages or fills a particular niche can stand out in a crowded market.

Each of these factors plays a significant role in shaping a cryptocurrency's market performance and potential for growth, making them essential components of effective investment strategies in the crypto sector.

Technological Assessments

Also, the technological backbone of a blockchain project is a critical element of fundamental analysis. The core technology not only supports the project's functionality but also shapes its future scalability and security profile. As investors delve into the whitepapers and roadmaps, understanding the underlying technology—be it a unique consensus mechanism or a novel cryptographic approach—provides insights into the project's innovative potential and operational viability.

Security is paramount in blockchain projects due to the decentralised nature and the high-value assets involved. A project's ability to protect against security vulnerabilities and potential breaches is a strong indicator of its technical robustness and maturity. Similarly, scalability is another vital aspect; it determines a project's capacity to handle growth in terms of transaction volume and size of the network without compromising speed or user experience.

Evaluating these technological factors provides a deeper understanding of a project's strengths and weaknesses, informing better investment strategies and risk management practices in the competitive landscape of crypto assets.

Community and Ecosystem Analysis

The success of cryptocurrency projects often hinges on the strength and engagement of their communities. In the decentralised world of crypto, where formal marketing and governance can be minimal, a vibrant and active community not only fosters innovation and support but also acts as a crucial barometer of trust and sustainability. Positive community sentiment, demonstrated through active participation in forums, social media, and development activities, can significantly enhance a project's credibility and attract new investors.

Strategic partnerships are equally critical, serving as a catalyst for ecosystem growth. By aligning with established tech firms, financial institutions, or other blockchain projects, a cryptocurrency can rapidly expand its technological infrastructure, user base, and market penetration. These collaborations often bring about integrations and innovations that are essential for staying competitive in a rapidly evolving market.

Together, community engagement and strategic partnerships form the backbone of a project's ecosystem. They not only validate the project's current status but also indicate its potential for future growth and success in the broader crypto market.

Regulatory and Compliance Challenges

The regulatory environment plays a decisive role in the success and stability of crypto projects. Navigating the regulatory landscape is pivotal for projects to gain legitimacy and trust. Changes in regulations can greatly influence market demand and the broader adoption of cryptocurrencies. For investors, understanding the regulatory compliance of a project is essential to assess its long-term viability and legal risks.

Compliance challenges can have profound implications:

  • Market Access: Regulatory approval can open or close significant markets. For instance, approval by the SEC or the EU can boost investor confidence and increase the user base substantially.
  • Investor Protection: Projects adhering to regulatory standards are generally deemed safer, reducing the risks associated with fraudulent activities or market manipulation.
  • Operational Continuity: Non-compliance can lead to legal battles or shutdowns, abruptly halting project operations and impacting investment returns.

Investors must evaluate how well a crypto project adheres to the regulatory frameworks of the jurisdictions in which it operates. This includes analysing the project's whitepaper and roadmap for compliance strategies, and assessing the robustness of its risk management systems. A strong understanding of the regulatory environment not only helps in managing potential risks but also in identifying opportunities within the regulatory frameworks.

Risk Assessment in Crypto Investments

Identifying and managing risks is essential for anyone involved in crypto trading. The volatile nature of cryptocurrencies, driven by technological, market, and regulatory factors, necessitates a comprehensive risk assessment strategy to safeguard investments.

  • Technological Risks: These include issues such as security vulnerabilities in a blockchain's design or execution flaws in smart contracts that could lead to breaches or losses. Investors must evaluate the security measures detailed in the project’s whitepaper and assess the frequency and transparency of the project's code audits.
  • Market Risks: Cryptocurrency markets are notoriously volatile, with prices fluctuating dramatically within short periods. This volatility can be driven by various factors, including media hype, market sentiment, and macroeconomic indicators. Traders need to be adept at reading market signs and employ strategies such as stop-loss orders to manage their exposure.
  • Regulatory Risks: The regulatory landscape for cryptocurrencies is still evolving, with significant differences across jurisdictions. Changes in regulations can have abrupt and profound impacts on market dynamics and the legal standing of crypto projects. Investors should stay informed about the regulatory status of cryptocurrencies in their countries and globally to anticipate changes that might affect their holdings.

Effective risk management in crypto trading involves a combination of staying updated on technological developments, closely monitoring market trends, and understanding the potential regulatory shifts. This holistic approach helps investors mitigate risks and capitalise on opportunities in the dynamic crypto market.

The Bottom Line

Fundamental analysis is indispensable in crypto trading as it provides a comprehensive evaluation of underlying project strengths and market potentials. By examining aspects such as technology, tokenomics, and the regulatory environment, investors gain a deep understanding of the intrinsic value and sustainability of crypto assets. 

Leveraging this analysis enables informed investment decisions, minimising risks associated with market volatility and regulatory uncertainties. Ultimately, mastering fundamental analysis equips investors with the knowledge to navigate the complex crypto market and capitalise on opportunities with confidence.

5 min read
CVEX Testnet: Frequently Asked Questions

We carefully gathered dozens of questions about testnet activities and our plans on CVEX that are interesting to users. So, search for everything you need below and share your wisdom with others. 

About Testnet

How can I get an “Early testnet adopter” role?

Unfortunately, this role is no longer available, but you still have a chance to participate in other activities. 

Find more information here: https://discord.com/channels/1140960876992659506/1141560549843423352.

Why isn’t CVEX Guild being updated? 

We manually update all the data about users' progress every few days. So, please wait a bit and check Guild after a while. However, if you think enough time has passed, and the information still hasn't been released, contact our worker bees in Discord.

Can I share CVEX achievements conditions in the chat?

No. Sharing descriptions of achievements you have unlocked in the official chat rooms and CVEX community channel is forbidden. Nevertheless, we cannot regulate your actions outside our official community.

How do I participate in the CVEX Tetnet? 

The basic logic of our Testnet revolves around the XP points system. The number of XP points you earn is directly proportional to your contribution to testing the platform and our marketing activities. To earn points, you can complete achievements in our trading terminal, refer your friends, and follow our social media closely to avoid missing new features.

More information on our lending.

Are there any guides on CVEX Testnet?

Yes. We have put a lot of effort into trying to provide you with up-to-date guides about our CVEX testnet and trading in general. 

You can find them here:

Youtube — https://www.youtube.com/@cvex_xyz;

Blog — https://cvex.xyz/blog;

CVEX DOCs — https://docs.cvex.xyz/.

I found a bug. What should I do?

Firstly, we appreciate your participation! We’re still in the testnet phase, so we’re constantly working on improving our terminal and providing you with the best possible experience. If you find a bug, you can report it on our terminal.

Check out this video guide to learn how. 

How can I suggest a feature?

It's always good to hear new ideas. If you know what would make CVEX better, let us know at this link: https://cvex.nolt.io/

Why doesn't Galxe accept my tasks?

Galxe is a perfect platform for our connection with you. However it operates with tons of data every day and need time to process it. Please, make sure you completed all requirements mentioned in the task and wait a while. If the problem persists, contact our community guys for help.

About our Roadmap

Is there a mobile version of CVEX platform?

No, a mobile version is currently in development. Please look forward to upcoming updates where we plan to introduce a mobile-friendly trading experience.

Will there be a white theme?

Yes, we are actively working on designing a light theme for our platform. This option will be available in a future update to provide our users with more visual choices.

Can I place a stop loss/take profit?

Not yet, but we are committed to broadening our list of risk management tools, including the addition of stop loss and take profit functionalities. These features will enhance trading strategies and improve risk management on our platform.

Is it possible to avoid signing a transaction every time?

Not currently, but we are developing a trusted mode that will allow users to execute transactions without needing to sign each one individually. This feature will also help save on transaction fees and improve the trading experience.

Will there be contracts for meme tokens in the future?

Yes, we are open to expanding our offerings to include meme tokens. We understand the popular demand and are considering how best to integrate these into our platform.

Will it be possible to trade COMMODITIES in the future?

Yes, we are working on the technical aspects of integrating commodities into our platform. Once we can ensure reliable pricing models, we will offer commodities trading to meet our users' diverse investment needs.

About Trading Activities 

What types of orders exist?

In the CVEX Platforms, there are two primary types of orders used:

  • Market Orders: Executed immediately at the current market price, designed for traders prioritising speed over control of the execution price.
  • Limit Orders: Specify a price limit for buying or selling an asset, providing control over the execution price but not guaranteeing execution.

What will happen to my position if the contract expires?

If the contract expires, a position gets settled, and profits and losses are distributed based on the latest Index price.

What should I do if my Margin utilisation level is over 90, and I cannot close my position? 

While in the testnet stage, you can just use the faucet and click ‘increase’ under account details. As a result, your balance will be replenished, and the margin ratio will be lowered. However, we recommend not bringing your account to this state and keeping a close eye on the margin ratio to avoid such a situation.

We recommend you to read this article, where you can learn more about margin ratio: https://cvex.xyz/post/initial-and-required-margin-margin-utilisation.

What is the index price?

The Index Price is provided by the Price Oracle and is used in the calculation of the Mark Price for futures and perpetual contracts on the CVEX Protocol. It reflects the real-time price of the underlying asset.

Check out this guide for a better understanding of pricing models: https://cvex.xyz/post/concepts-of-last-mark-and-index-prices.

What is the mark price?

The Mark Price in the CVEX Protocol is continuously re-evaluated to reflect the contract's fair price, serving as an anchor to the market's perception of the true value of a contract, independent of immediate order book fluctuations. It is used to assess traders’ position value for futures and perpetual contracts, which is used to calculate equity and maintenance margins. 

The Mark Price is calculated from the Index Price of the underlying asset, provided by the Price Oracle, and the Last Price, obtained from the contract's order book. The Last Price is the median value between the lowest ask and the highest bid prices in the CVEX order book, averaged for the Index Price updates. The protocol computes the contract basis as a moving average of the difference between the Index Price and the Last Price, and the current Mark Price is calculated by adjusting the current Index Price with the basis.

Check out this guide for a better understanding of pricing models: https://cvex.xyz/post/concepts-of-last-mark-and-index-prices.

How can I increase my leverage?

To increase your leverage on the Crypto Valley Exchange, you can employ hedging strategies. For example, holding a balanced long position in Ethereum (ETH) and a short position in Bitcoin (BTC) can extend leverage up to 15x. 

Additionally, for larger options portfolios that are well-hedged, particularly where the delta of the portfolio is well managed, you can build a cost-effective book of options with leverage ratios reaching up to 1000x. It's also noted that leverage varies for commodities, ranging from 10x to significantly higher depending on the commodity's volatility.

Also,we are working on manually adjustable leverage, which should be done for public mainnet release.

I don’t have ETH for commissions will I be able to trade?

Yes. You don't have to have ETH in your wallet to trade on CVEX.

While we are in the testnet stage, you use our inbuilt faucet, so you don't need money at all. At the mainnet stage, CVEX will use the meta-transaction principle. In short, when you open an order or perform any other action that executed on-chain CVEX pays gas for you and then compensates it through operational fees.

So you don't have to worry if you don't have ETH in your wallet.

What is the Trading fee and operational fee?

The Operational Fee is a fixed cost for each trade, paid in USDC from traders' collateral deposits, designed to compensate for the gas used by protocol participants in managing traders' orders and positions. It is independent of trade size and is directed to the platform's Operational Fund.

The Trading Fee is a relative fee based on the notional value of each order. The collected trading fees are distributed between the Platform Fund and the Protocol Fund, with the Platform Fund covering the expenses of platform operators and the Protocol Fund allocated for staking rewards, protocol development, and operational needs.

What measures does CVEX take to ensure the security and stability of its decentralised derivatives exchange?

CVEX ensures the security and stability of its decentralised derivatives exchange through several measures, particularly in volatile market conditions:

  • On-chain Portfolio Risk Management: CVEX employs a Value-at-Risk (VaR) model for on-chain portfolio risk management, allowing traders to utilise higher leverage while maintaining controlled risk exposure. This model accounts for volatility, correlations, and tail risks to estimate potential losses within a specified confidence interval.
  • Automated Clearance Bots: The exchange uses automated Clearance Bots that operate within set risk parameters deterministically to reinforce stability and security. These bots are part of an active market monitoring system.
  • Risk Oracles: Specialised Risk Oracles adjust risk parameters in real-time to adapt to market changes, ensuring that the exchange can respond quickly to fluctuations in market conditions.
  • Fully Automated Default Funds: An extra layer of protection is provided by fully automated Default Funds, which help maintain market stability in volatile conditions.
  • Advanced Margin Methodology: The CVEX Protocol calculates margin requirements using dynamic risk models that align collateral obligations with the actual risks of traders’ portfolios. This includes a concentration adjustment to limit risks from an overconcentration of open interest in a single portfolio.
  • Liquidation Protocol and Counterparty Risk Management: The liquidation protocol prioritises market order liquidations to realise fair value, utilising the Default Fund where necessary to cover losses. Counterparty liquidations are a last resort, utilised only to preserve market balance when all other measures are exhausted.

Do you have risk management tools?

Yes, the protocol incorporates risk management tools and strategies. These include:

Transparent Risk Parameters. The platform operates with transparent risk parameters encoded into smart contracts to mitigate trading risks.

Independent Account Management. Each account is treated as an independent entity with its own risk profile, enabling precise risk management.

Also, you may read the article on our VaR-Margin system to understand more: https://cvex.xyz/post/the-impact-of-value-at-risk-var-model-at-cvex.

How to partially close the position?

To close a part of a position, you can do the opposite action. If you open a long position, you need to sell the part of the contract by which you want to reduce your position. If you opened short, you should do the opposite.

It is important to click on the ‘Reduce-only’ checkbox when opening a new order.

5 min read
Classic (Dated) Futures vs. Perpetual Futures

Futures contracts play a pivotal role in the trading world, especially in the rapidly evolving landscape of cryptocurrency trading. There are two main types of futures contracts that crypto traders can utilise: classic (dated) futures and perpetual futures. Understanding the differences between these two types is crucial for anyone involved in the dynamic world of crypto trading.

Dated futures contracts, often referred to as dated futures, have a specific expiration date and are typically used for hedging or speculating on the future price of an asset, including cryptocurrencies. 

On the other hand, perpetual futures, which are particularly popular in the crypto sphere, do not have a fixed expiration date, offering traders a different level of flexibility in managing their positions.

Each of these contract types offers unique benefits and challenges, especially in the context of crypto trading, where price volatility is often high. Understanding how each contract operates can help traders navigate the complexities of crypto markets more effectively.

 Definition of Classic (Dated) Futures Contracts

Classic, or dated, futures contracts are standardised financial agreements that obligate two parties to buy or sell an asset at a predetermined price on a specified future date. These contracts are typically traded on regulated exchanges and cover a wide range of underlying assets, including commodities, stocks, and cryptocurrencies.

How Classic Futures Are Typically Structured

Dated futures contracts have a set expiration date, which means they come with a defined lifespan. Traders agree to the terms of the contract, which include the quantity of the asset, the price, and the expiration date. As the expiration date approaches, the price of the contract usually converges with the spot price of the underlying asset, influenced by factors such as interest rates, storage costs, and market demand. This structure allows traders to hedge against future price movements or speculate on asset prices.

Classic futures contracts play a crucial role in the financial world. They are widely used for hedging, allowing businesses and investors to protect themselves against adverse price movements. For example, a farmer might use futures contracts to lock in a selling price for their crops, while an airline might use them to secure fuel prices. 

Additionally, traders use dated futures for speculation, aiming to profit from price changes. These contracts facilitate price discovery and liquidity in various markets, contributing to the overall efficiency of the financial system.

Definition of Perpetual Futures Contracts

Perpetual futures contracts are a type of derivative that allows traders to speculate on the future price of an asset without a set expiration date. Unlike classic futures, perpetual futures do not have a fixed term, which means traders can hold their positions for as long as they wish. These contracts are especially popular in the cryptocurrency markets, where they offer continuous trading opportunities.

How Perpetual Futures Differ from Classic Futures

The key difference between perpetual and dated futures lies in their expiration dates. While classic futures have a specific date at which they must be settled, perpetual futures do not, offering traders the flexibility to maintain their positions indefinitely. 

Additionally, perpetual futures typically use a funding rate mechanism, which adjusts periodically to ensure that the contract price aligns with the underlying spot price. This funding rate incentivises traders to take positions that bring the contract price back in line with the spot price.

Perpetual futures have found a significant niche in the trading world, particularly in the cryptocurrency space. Their flexible nature allows traders to capitalise on short-term market movements without worrying about contract expiration. This feature is beneficial in highly volatile markets, where timing is critical. Perpetual futures also facilitate leveraged trading, enabling traders to amplify their positions and potentially increase their returns. These contracts offer a dynamic trading environment and cater to a wide range of trading strategies, making them a valuable tool for crypto traders and speculators.

Key Differences Between Dated and Perpetual Futures

Expiration

  • Dated futures contracts have set expiration dates. This means traders have a limited time frame to manage their positions and must settle or roll over their contracts before the expiry date. The fixed expiration date helps provide clarity on when the contract must be concluded.

  • Perpetual futures contracts, on the other hand, do not have fixed expiration dates. Traders can hold their positions indefinitely, providing greater flexibility in reacting to market conditions. This open-ended nature of perpetual futures aligns well with the continuous nature of cryptocurrency trading.

Funding Mechanism

  • Classic futures do not incorporate a funding rate mechanism. The contract price is influenced primarily by the spot price of the underlying asset, along with other factors like interest rates and storage costs. This traditional pricing approach is straightforward but lacks a dynamic adjustment mechanism.

  • Perpetual futures use a funding rate mechanism to align the contract price with the underlying spot price. This rate, which is periodically exchanged between long and short positions, ensures that the contract closely tracks the spot market. The funding mechanism serves as a stabilising force, reducing deviations between the contract and spot prices.

Trading Flexibility

  • The trading periods for classic futures are restricted by the contract's expiration date. Traders need to plan their entry and exit strategies within the contract’s lifespan, which can limit their flexibility in managing their positions.

  • Perpetual futures offer continuous trading opportunities, without the constraints of an expiration date. Traders can enter and exit positions at their convenience, aligning with market trends and personal strategies. This flexibility is particularly beneficial in highly volatile markets where timing is crucial.

Pricing Mechanisms

The pricing mechanisms for classic futures and perpetual futures differ based on their unique characteristics. Dated futures derive their prices from various factors, including the spot price of the underlying asset, interest rates, storage costs, and other economic influences. As the contract nears its expiration date, the futures price typically converges with the spot price, thanks to the process of arbitrage. This helps align the futures price with the actual market value of the asset.

Perpetual futures, on the other hand, employ a funding rate mechanism to maintain a close relationship with the underlying spot price. The funding rate is a periodic payment exchanged between long and short positions to ensure the contract price remains aligned with the spot market. When the contract price deviates from the spot price, the funding rate incentivises traders to correct the imbalance, helping to stabilise the contract's value.

How These Mechanisms Impact Trading Decisions

The pricing mechanisms of both types of futures contracts significantly impact trading decisions. In classic futures, the convergence of the futures price with the spot price near expiration can influence when traders choose to enter or exit their positions. Understanding how factors like interest rates and storage costs affect the pricing can also help traders make informed decisions.

For perpetual futures, the funding rate directly affects the cost of holding positions. Traders must monitor these rates closely, as they can influence the profitability of long or short positions over time. High funding rates, for example, can make it costly to maintain a long-term position, while negative funding rates may benefit short positions. This dynamic pricing environment requires traders to be vigilant about market conditions and adjust their strategies accordingly.

Conclusion

Classic (dated) futures and perpetual futures offer distinct features and benefits for traders and investors. Classic futures, with their set expiration dates, are ideal for traditional hedging and speculation. Perpetual futures, with their open-ended nature and dynamic funding rates, cater to continuous trading and leveraged strategies, particularly in the cryptocurrency space. Understanding the unique pricing mechanisms and trading flexibilities of each contract type is essential for making informed trading decisions. By carefully evaluating these characteristics, traders can align their strategies with their financial goals and effectively navigate the diverse futures markets.

5 min read
Concepts of Last, Mark and Index Prices

In derivatives trading, knowing your prices is key. On CVEX, understanding the Last, Mark, and Index prices is crucial for making informed decisions. These price types impact everything from trade execution to risk management. This guide will simplify these concepts, helping both newcomers and seasoned traders grasp when and how to use each price type effectively. Stick with us to demystify these terms and boost your trading strategy on CVEX.

Overview of Price Types

On CVEX, traders encounter three main types of prices: Last, Mark, and Index. Each serves a unique role in the trading ecosystem.

Last Price

This is the median value between the lowest selling price (ask) and the highest buying price (bid) currently in the CVEX order book. It reflects the most recent price agreed upon by buyers and sellers.

Mark Price

Used mainly for calculating the value of open positions in futures and perpetual contracts, the Mark Price helps prevent unnecessary liquidations during market manipulation or extreme volatility. It's derived from the Index Price, adjusted by the average difference (basis) between the Last Price and the Index Price.

Index Price

Sourced from a Price Oracle, the Index Price aggregates data from various external exchanges to represent the true market value of the underlying asset. It is crucial for ensuring that the Mark Price remains anchored to real-world trading conditions outside of CVEX.

Understanding these prices helps traders manage their positions more effectively, aligning their strategies with current market dynamics.

Last Price

The Last Price on CVEX serves as a snapshot of the most recent consensus on value between buyers and sellers. It's pivotal for traders as it reflects the latest price at which a trade was executed, thus acting as a real-time indicator of current market conditions.

How It's Determined on CVEX:

On CVEX, the Last Price isn't just about the last individual transaction. Instead, it is calculated as the median of the lowest selling price (ask) and the highest buying price (bid) present in the order book. This value is then averaged over the same time frame that the Index Price updates occur. This method smooths out any anomalies caused by single transactions and provides a more stable and reliable price for traders to reference, ensuring that the price reflects a true median market value rather than outliers.

When to Use It?

The Last Price is particularly useful for traders who need to make quick decisions based on the most recent trading data. It's ideal for day traders or those involved in high-frequency trading where timing and immediate market conditions are critical. Understanding the Last Price helps traders grasp how the market has recently valued an asset, which is essential for short-term trading strategies that rely on quick, tactical entries and exits.

Mark Price

The Mark Price is critical in the trading of futures and perpetual contracts on CVEX. It serves as the primary reference for valuing positions and determining liquidation points, ensuring that these calculations are based on a stable and manipulation-resistant price metric.

How It's Determined on CVEX:

Mark Price is calculated by adjusting the Index Price with the basis, which is a moving average of the difference between the Last Price and the Index Price. This methodology allows the Mark Price to reflect both current market conditions and average price trends, smoothing out the effects of short-term volatility or manipulation in the order book.

When to Use It?

Traders should rely on the Mark Price primarily to assess the health of their open positions in derivatives like futures and perpetual contracts. It is essential for understanding potential margin requirements and avoiding unwanted liquidations. The Mark Price's stability makes it suitable for traders who need consistent, reliable pricing data to manage longer-term positions or to strategise around entry and exit points during more volatile market periods.

Index Price

The Index Price is vital as it represents the aggregated perception of the underlying asset's true market value across various exchanges. It's an essential benchmark on CVEX, especially for derivatives trading, where it helps ensure that the contract prices are aligned with the broader market conditions.

Source on CVEX:

The Index Price on CVEX is sourced from a Price Oracle, which gathers data from multiple top exchanges to provide a comprehensive and reliable measure of the current value of an asset. This integration helps prevent price manipulation by dispersing the influence any single exchange could have on the price determination.

When to Use It?

Traders should look at the Index Price when evaluating the overall market trends and the inherent value of an asset without the immediate influences of supply and demand mismatches that can occur on a single exchange. It is particularly useful for making strategic decisions in futures and options trading, where accuracy in the underlying asset's price is crucial. Understanding the Index Price helps traders gauge the market consensus on asset value, aiding in more informed trading decisions.

Relationship Between the Prices

Understanding how Last, Mark, and Index Prices interact is crucial for traders on CVEX. These prices each play a unique role but are interdependent, influencing and stabilising each other to reflect accurate market conditions.

  • Last Price reflects real-time market transactions, influenced by immediate buyer and seller activities.
  • Index Price offers a broader market perspective by aggregating data across various exchanges, providing a benchmark for the true market value.
  • Mark Price connects the immediate market activities and broader market trends by adjusting the Index Price with the basis derived from the Last Price. This adjustment helps in mitigating any temporary market anomalies caused by low liquidity or price manipulations on single exchanges.

Example Scenarios:

Scenario 1: Sudden Market Spike

If there's a sudden spike in the Last Price due to a large buy order on CVEX, the Mark Price will adjust less dramatically because it’s tempered by the Index Price, which aggregates more stable prices across multiple exchanges.

Traders relying solely on the Last Price might perceive a buying opportunity, but those watching the Mark Price receive a moderated view, potentially saving them from buying at a peak based on skewed data.

Scenario 2: Broader Market Downturn

When the Index Price begins to reflect a downturn based on global market trends, the Mark Price will follow, even if the Last Price on CVEX hasn’t yet adjusted due to localised trading patterns.

Traders can anticipate a potential decline in the CVEX market and adjust their positions accordingly, using the Mark Price as a more reliable indicator of impending changes.

When to Use Each Price:

  1. Use the Last Price for immediate entry or exit decisions when market conditions match your trading strategy.
  2. Refer to the Index Price to understand long-term trends and set broader strategic goals.
  3. Rely on the Mark Price for managing open positions, especially in derivatives, to protect against volatility and price manipulation, ensuring fair trading conditions and risk assessment.

By leveraging the distinct yet complementary roles of these three price types, traders can optimise their strategies, manage risks more effectively, and make decisions that align with both immediate conditions and broader market movements.

Wrapping Up

Understanding Last, Mark, and Index prices equips traders with essential insights into market dynamics on the CVEX platform. By discerning the interplay between these price types, traders can enhance their strategic decision-making, manage risks effectively, and adapt to both sudden changes and long-term trends in the cryptocurrency market.

No results found.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Subscribe to our newsletter

Stay updated with the latest news and insights.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

As seen in

See all the Crypto Valley Exchange ecosytem in media.