Cboe's perpetual VIX idea trades the cost of rolling for the cost of funding

People hold long VIX positions as protection, because the index jumps when investors rush to buy options against a rapid market drop ^[17]. The protection costs money to carry either way. A dated future charges it at each roll ^[5]. A perpetual would charge it through funding payments, and CoinDesk notes those are still a cost ^[12]. The design ends the roll, or rather, it ends the fixed dates on which the roll is paid. Whether it cuts the expense depends on a funding formula Cboe has not written ^[2].

A dealer short a bitcoin perpetual can hedge by buying bitcoin ^[13]. Nobody can buy the VIX. It is a calculation over S&P 500 options prices that estimates 30-day volatility ^[3], so there is no cash asset to hold against the contract ^[13]. "For us, the interesting question is how funding would anchor an index that cannot be bought as a cash asset," analysts at Marex Solutions said in an email ^[14]. "Removing expiry does not remove hedge costs or basis risk," they wrote ^[15].

Martin Lee, market insights lead at DWF Labs, made the trader's case. "Traders don't have to worry about expiries and decay and just focus on the direction of where they think the underlying is heading," he told CoinDesk ^[7]. The Marex analysts called the idea "a potential new volatility market, not a cheaper substitute for options convexity" until contract terms exist ^[16].

The work is early enough that Cboe may never file ^[2]. If it does file, funding might charge about what the roll charges now, and holders would pay the same carry on a different schedule. The third outcome is the one CoinDesk sets out. A launch brings in more traders, and more hedging by market makers across VIX futures and other S&P 500 derivatives pulls the various VIX products into closer agreement ^[11].

I'd expect volume to decide it. If a perpetual costs about as much to hold as a rolled future, it has to attract trading that the dated contracts do not, and the crypto precedent so far is weak. Gate already lists VIX/USDT perpetuals, and CoinDesk describes that market as highly illiquid with little noticeable volume ^[9]. The counter-case is that the convenience Lee describes, dropping expiries altogether ^[7], brings in traders whatever the funding costs. If a Cboe perpetual pulled volume away from dated VIX futures in its first months, that case would be right and the carry comparison would matter less.