Liquidity providers deposit collateral and mint volatility tokens. Traders can then purchase these volatility tokens to express views on market volatility.

Volmex enables VIX-like indices for crypto assets and trading functionality on Ethereum. Volmex was founded by Cole Kennelly and launched in 2021.

The Volmex team and investors own and govern the protocol. They currently charge a minting and redemption fee (revenue). Volmex’s investors include Three Arrows Capital, Robot Ventures, CMS Holdings etc.

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Volmex

# Volmex Notional trading volume Methodology

## 1. Overview

Volmex notional trading volume measures the total value of collateral locked and released in Volmex volatility derivative positions on a daily basis. The metric captures trading activity in volatility products (ETHV and BTCV) by tracking collateral movements in and out of Volmex vault contracts. This provides insight into the scale of derivatives trading activity on the Volmex protocol across Ethereum, Arbitrum, and Polygon networks.

## 2. Data sources

The calculation uses several types of blockchain and external data:

- **Blockchain events**: Parsed `CollateralToken_Collateralized_event` and `CollateralToken_Redeemed_event` logs from Volmex v1 protocol contracts on Ethereum, Arbitrum, and Polygon networks
- **Contract metadata**: Hardcoded vault configuration mapping vault contract addresses to their underlying collateral tokens (DAI and USDC)
- **External data**: End-of-day token price feeds for USD conversion and token metadata for decimal normalization

The methodology focuses on collateral movements in Volmex vault contracts, which represent the notional value of volatility derivative positions being opened and closed.

## 3. Step-by-step calculation

### Component A: Collateral event extraction
- **Purpose**: Capture all collateral lock and release events from Volmex vaults across supported chains
- **Logic**: The calculation processes two types of events from Volmex v1 protocol contracts. For collateralization events (when users open positions), it extracts the `collateralLock` amount representing collateral being locked into vaults. For redemption events (when users close positions), it extracts the `collateralReleased` amount representing collateral being withdrawn from vaults. Events are collected from three blockchain networks: Ethereum, Arbitrum, and Polygon. Each event includes block timestamp, transaction hash, log index, vault address, and the collateral amount being moved.
- **Key fields**: `block_timestamp` for timing, `transaction_hash` and `log_index` for event identification, `address` for vault contract, `collateralLock` for position opening amounts, `collateralReleased` for position closing amounts

### Component B: Vault and token mapping
- **Purpose**: Map vault contract addresses to their underlying collateral tokens and volatility products
- **Logic**: Each Volmex vault contract corresponds to a specific volatility product (ETHV for Ethereum volatility or BTCV for Bitcoin volatility) with a specific collateral token (DAI or USDC). The methodology uses a hardcoded configuration table containing 12 vault configurations across the three supported chains. Each configuration specifies the chain, vault symbol, vault contract address, and underlying collateral token address. This mapping allows the system to identify which collateral token is being used for each trading event and properly categorize the activity.
- **Key fields**: `chain` for blockchain network, `token_symbol` for vault identification, `vault_address` for contract matching, `token_address` for collateral token identification

### Component C: Business classification
- **Purpose**: Standardize business line and product categorization for all trading events
- **Logic**: All collateral movements in Volmex vaults are classified consistently across the dataset. Every event is tagged with "Volatility trading" as the business line since Volmex specializes in volatility derivatives. The market sector is set to "derivatives" and business segment to "perpetual" reflecting the nature of Volmex products. The version field captures the protocol version (v1), and product ID is left null as there are no specific product subdivisions beyond the vault-level categorization.
- **Key fields**: `business_line` set to "Volatility trading", `market_sector_id` set to "derivatives", `business_segment_id` set to "perpetual", `version` indicating protocol version

### Final aggregation
- **Combining components**: Collateral events are combined with vault metadata through inner joins matching vault addresses. Inflow and outflow events are unioned together to create a comprehensive view of all collateral movements. Events from all three chains are combined into a single dataset.
- **Currency conversion**: Raw collateral amounts are converted to USD using end-of-day price feeds for the respective collateral tokens (DAI, USDC). Decimal corrections are applied based on token-specific decimal places to ensure proper scaling of amounts.
- **Time aggregation**: Block timestamps are truncated to daily boundaries, creating daily time buckets for aggregation. All events within each day are grouped together by chain and token address.
- **Final calculation**: The final notional trading volume represents the total USD value of collateral movements (both locks and releases) within each daily period. This captures the complete notional value of trading activity as users open and close volatility derivative positions. Missing days are filled with zero values to maintain complete time series data.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total USD value of derivative contracts executed on the protocol.

Volmex

Notional trading volume

Notional trading volume

Competitive landscape

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