The buyer receives the notional amount times (realized variance − strike). When the amount is negative, the buyer pays the seller. The notional is expressed as an amount per volatility point squared.
Consider a hypothetical example in which the strike is 20% (400 in variance) and the notional is 25,000 yen per volatility point squared. If realized volatility is 25%, the buyer receives 25,000 yen × (625 − 400) = 5.625 million yen. If realized volatility is 15%, the buyer pays 25,000 yen × (400 − 225) = 4.375 million yen.
It differs from a volatility swap, which exchanges volatility itself, in that the payment is a quadratic function of volatility.