https://polkadot.subsquare.io/referenda/1421

Basic Information

Volmex Labs is submitting this proposal to integrate Volmex indices with a soon-to-launch Polkadot-native decentralized perpetual futures exchange. The implementation will be carried out in partnership with Transistor, a leading agent in Polkadot ecosystem development. We are requesting $375,000 in USDC to fund this comprehensive three-year initiative, which encompasses initial integration costs, ongoing maintenance, legal compliance, and go-to-market operations. 

Executive Summary

The Polkadot ecosystem stands at a critical point in its evolution, with an increasing demand for advanced financial instruments and trading capabilities. This proposal aims to meet this demand by integrating Volmex’s advanced volatility indices and trading infrastructure across Polkadot's top decentralized exchanges. This integration will greatly enhance Polkadot's DeFi capabilities, offering users access to sophisticated volatility trading instruments while drawing in new users and significant liquidity to the ecosystem.

Project Scope

The scope of this integration encompasses several interconnected components that together will create a robust and sustainable volatility trading infrastructure within the Polkadot ecosystem. At its core, the integration requires extensive smart contract development and deployment, with careful optimization for each target DEX's unique characteristics. This includes implementing Volmex's proprietary volatility index calculations and establishing a reliable cross-chain messaging system to ensure seamless operation across the network.

For this integration, we will create custom interfaces that align with their existing architectures while ensuring consistent functionality. This encompasses advanced liquidity pool optimization algorithms designed to guarantee efficient capital utilization and minimal slippage across all trading pairs. The integration will also include platform-specific security measures tailored to the unique requirements and risk profile of each DEX.

Budget Allocation and Justification

The $375,000 budget request has been structured to ensure comprehensive coverage of all project aspects while maintaining efficient resource utilization. Initial integration costs account for $200,000 of the total budget, encompassing extensive smart contract development, multiple rounds of security audits, platform-specific adaptations, and thorough testing protocols. This significant upfront investment reflects the complexity of implementing sophisticated financial instruments across multiple platforms while maintaining the highest security standards.

We have allocated three years of maintenance support, with a front-loaded structure acknowledging the higher support requirements in the first year after launch. This includes continuous monitoring, regular updates, and performance optimization across all integrated platforms. The maintenance budget ensures sustainable long-term operation and the ability to respond quickly to any technical challenges that may arise.

Legal and compliance considerations encompass thorough legal documentation and continuous regulatory compliance measures. This investment is essential for ensuring the integration complies with all current and expected regulatory requirements across relevant jurisdictions.

The go-to-market operations will support a comprehensive launch strategy that includes targeted marketing campaigns, community education initiatives, detailed documentation development, and strategic user acquisition programs. This allocation ensures effective market penetration and sustainable user adoption across all integrated platforms.

Implementation Timeline and Methodology

The integration will follow a methodical, phased approach over nine months and three years of sustained maintenance and optimization. The initial three months will focus on foundational development, including core smart contract implementation and initial security audits. This phase will establish the basic infrastructure necessary for the integration while ensuring robust security measures are in place from the start.

This parallel development approach allows for efficient resource utilization while ensuring each integration receives the attention to detail it requires. During this phase, we will conduct extensive testing and optimization, culminating in comprehensive security audits for each platform integration.

The final three months of the initial phase will focus on public launch preparations and early optimization efforts. This includes extensive testing under real-world conditions, community education initiatives, and the implementation of feedback mechanisms for continuous improvement.

Team Expertise and Implementation Strategy

The integration will be executed by a combined team from Volmex Labs and Transistor, bringing together deep expertise in both volatility trading infrastructure and Polkadot ecosystem development.

Volmex Labs brings extensive experience in developing and deploying volatility indices across multiple blockchain networks, with a proven track record of successful implementations and sustained operation. The Volmex Labs team is composed of world-class business professionals, quants, and engineers from various crypto and traditional financial industry companies, including IMC Trading, Staked (acq. by Kraken), and more.

Transistor's team will provide crucial expertise in Polkadot-specific development requirements and best practices, ensuring seamless integration with existing ecosystem infrastructure. Their experience with similar integration projects within the Polkadot ecosystem will be invaluable in anticipating and addressing potential challenges before they arise.

Performance Metrics and Success Criteria

Success of the integration will be measured through a comprehensive set of technical and adoption metrics. From a technical perspective, we will monitor transaction processing times, targeting consistent sub-two-second completion times across all platforms. System uptime will be tracked with a target of 99.9% availability, while security incidents will be monitored with a zero-tolerance approach.

Adoption metrics will focus on user engagement and liquidity depth, tracking monthly active users, trading volume growth, and liquidity pool utilization across all integrated platforms. Cross-chain transaction volume will serve as a key indicator of successful ecosystem integration and user adoption.

Risk Management Framework

Our risk management strategy addresses both technical and market-related challenges through a comprehensive framework of preventive and responsive measures. Technical risks are managed through multiple layers of security audits, extensive testing protocols, and carefully planned deployment strategies. We maintain emergency shutdown capabilities across all integrated platforms, allowing for immediate response to any potential security concerns.

Market risks are addressed through our multi-platform approach, which distributes risk across different user bases and liquidity pools. We will implement a gradual liquidity building strategy to ensure stable market development, supported by active community engagement and governance participation opportunities.

Reporting and Transparency Mechanisms

We are committed to maintaining full transparency throughout the integration process and subsequent operation. Regular comprehensive reports will be provided to the community, detailing development progress, security status, usage metrics, and financial updates. These reports will include detailed analysis of any technical challenges encountered and the solutions implemented, ensuring the community remains fully informed of the integration's status and performance.

Future Development Roadmap

This integration establishes a foundation for significant future expansion of volatility trading capabilities within the Polkadot ecosystem. Following successful implementation, we envision developing additional volatility products, enhancing cross-chain functionality, and introducing advanced trading features. Our roadmap includes plans for expanded platform integrations, subject to community governance and market demand.

Contact and Support Infrastructure

Comprehensive support infrastructure has been established to ensure effective communication with all stakeholders. Technical queries will be handled through a dedicated support team accessible via [email protected], while general inquiries can be directed to [email protected]. Active community engagement will be maintained through our Telegram (@VolmexLabs) and Discord (Volmex Community) channels, ensuring responsive communication with users and stakeholders.

Supporting Documentation

•⁠ ⁠Volmex Website: https://volmex.finance

•⁠ ⁠Volmex Implied Volatility Indices Methodology Paper: https://volmex.finance/Volmex-IV-paper.pdf

•⁠ ⁠Volmex charts: https://charts.volmex.finance

•⁠ BVIV Index on TradingView: https://www.tradingview.com/symbols/BVIV

•⁠ EVIV Index on TradingView: https://www.tradingview.com/symbols/EVIV

•⁠ ⁠X Account: https://twitter.com/volmexfinance

•⁠ First BVIV OTC Trade Announcement: https://www.b2c2.com/newspost/arbelos-and-b2c2-complete-first-bilateral-otc-option-transaction-on-bviv-index

•⁠ ⁠Websockets Docs: https://docs.volmex.finance/index-data-api

•⁠ ⁠Volmex REST API Docs: https://rest-v1.volmex.finance/api

•⁠ ⁠Golang SDK: https://github.com/volmexfinance/go-socket.io