PunchVIX

Overview

PunchVIX is a decentralized volatility index protocol within PunchSwap, enabling users to earn yield from the price changes of Flow EVM native and bridged assets. By tokenizing volatility indices, PunchVIX provides exposure to market volatility through diversified token baskets while offering direct yield farming opportunities.

Core Features

Fundamentally, PunchVIX works by creating a wrapped token of an underlying asset or basket of assets. These wrapped tokens trade openly on the market, and when the value of the wrapped token differs from the underlying asset market price, an arbitrage opportunity forms.

Arbitrage can be done via DEX trading to balance asset value, or via direct bond/unbond functions. All actions incur a protocol fee that goes back into the system via a combo of LP rewards, vixTKN burns, and FVIX buybacks.

Volatility Index Tokens (VIX Tokens)

  • Description: Tokenized volatility indices representing weighted baskets of assets.

  • Key Elements:

    • Rebalancing: Automatic maintenance of index weights.

    • Composability: Eligible for use in DeFi protocols, such as PunchLend.

Index Management

  • Bonding (Minting): Deposit assets to mint VIX tokens with a configurable bond fee.

  • Debonding (Redeeming): Burn VIX tokens for underlying assets, subject to a debond fee.

Trading & Liquidity

  • DEX Integration: Trade VIX tokens on PunchSwap DEX, with applicable buy/sell fees.

    • Note - this can be a sticky experience and we are actively improving it. Please note that the DEX router struggles to initiate transactions that trigger the fee distribution function, so you may need to wait for a bit until transactions are viable.

  • Liquidity Provision: Provide liquidity to earn trading fees, represented by LP tokens.

Staking & Rewards

  • LP Token Staking: Stake to earn additional rewards, with flexible withdrawal options.

  • Reward Distribution: Automatic reward compounding available.

Core Contracts

PunchVIX's core contract system is forked from Peapod Finance's audited contracts.

  • Fee Receiver: 0x200ceb9c40Ff9D502b0bCD3D6CEB7BaD046F7Ca6

  • RouterV2: 0xf45AFe28fd5519d5f8C1d4787a4D5f724C0eFa4d

  • RouterV3: 0xc02F6990F7D2cdbebf0a86Ca43bd4975e2B11f24

  • WeightedIndexFactory: 0x2b77578B42180C7B0F3D26aCe8DfafdD132E6312

  • ProtocolFees: 0xd019D76c2F2Bc395FcaFb1B43d72940588Ea351E

Protocol Fees

Fee Structure

Trading Fees

  • Bond Fee: 1-3% on minting VIX tokens

  • Debond Fee: 1-3% on redeeming VIX tokens

  • Buy Fee: 1-3% on DEX purchases

  • Sell Fee: 1-3% on DEX sales

  • Burn Fee: 0-40% — we have set our burn fee for whitelisted bundles at 1%

  • Transfer Tax: 1% on all VIX token transfers

Liquidity Fees

  • LP Fee: 0.3% standard trading fee

  • Volatility Premium: Additional 1% on VIX token trades

  • Multiple VIX Routes: 1% per VIX token in trading route

Of the fees that FVIX-driven protocol collects, the distribution is as follows:

  • Yield for sFVIX stakers: 25%

  • Yield Burn: 75%

Getting Started

  1. Acquire Assets: Obtain supported tokens, ensuring sufficient balance for fees.

  2. Choose Strategy: Engage in direct exposure, trading, or yield farming.

  3. Monitor Position: Use the core Volatility Markets section of the FVIX page for performance tracking and reward claiming.

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