Market Volatility

Volatility often refers to the amount of uncertainty or risk related to the size of changes the value. A higher volatility means that the value can potentially be spread out over a larger range of values. This means that the price can change dramatically over a short time period in either direction. A lower volatility means that the value does not fluctuate dramatically, and tends to be more steady.

Volatility is mainly used as a risk indicator, though there are other reasons attention. Increasing volatility brings greater risk and uncertainty, and vice versa.

You may need to assess the volatility of the current trading pair when providing liquidity and setting price range.

Multiple Finance offers a detailed market volatility chart, which can be used by LPs as an indicator of risk control.

There are two types of Volatility: Implied Volatility and Historical Volatility

Implied volatility, also known as projected volatility, allows to make a determination of just how volatile the market will be going forward. This concept also gives traders a way to calculate probability. One important point to note is that it shouldn’t be considered science, so it doesn’t provide a forecast of how the market will move in the future.

Historical volatility, also referred to as statistical volatility, gauges the fluctuations of underlying assets by measuring price changes over predetermined periods of time. It is the less prevalent metric compared to implied volatility because it isn’t forward-looking.

The market volatility offered by Multiple Protocol is the historical volatility (Backward lLoking)

About Multiple

Multiple Protocol is a Decentralized Finance (DeFi) protocol based on Ethereum that allows expert traders (GP) to provide professional AMM liquidity strategies, which in turn ensures users (LP) securely benefit from the best yielding products.

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Multiple Protocol - Unlocking the next phase of #DeFi, a playground for expert traders to provide professional trading AMM liquidity strategies on Uniswap V3