It is raining choices, CoinDesk mentioned final week, pointing to rising demand for derivatives linked to bitcoin (BTC) and different cryptocurrencies. Now, further proof has emerged within the type of file exercise within the decentralized finance (DeFi) area, which gives distinctive and programmable onchain choices, perpetuals and structured merchandise.
The full greenback worth of crypto tokens (TVL) locked on Derive has risen above $100 million, alongside file buying and selling quantity and month-to-month energetic merchants.
“The most recent market insights from Derive.xyz present outstanding progress and elevated exercise, with Derive’s complete worth exceeding $100 million for the primary time, amid file weeks for buying and selling quantity and energetic merchants,” mentioned Sean Dawson, head of analysis at Derive. CoinDesk in an e mail.
“The return on all USDC deposits has reached 10% on Derive.xyz, whereas reaching an all-time excessive in notional quantity of $369 million and month-to-month energetic transactions of 5,416,” Dawson added.
The Derive platform consists of Derive Chain, a transaction settlement layer; Derive Protocol, which permits permissionless, self-serving margin buying and selling of perpetuals, choices and spot; and Derive Change, an order ebook.
The file exercise on Derive corresponds with widespread demand for choices tied to cryptocurrencies and digital asset-related funding automobiles equivalent to spot ETFs and shares.
Choices are spinoff contracts that give the customer the proper to purchase or promote the underlying asset later at a predetermined value. A name offers the proper to purchase and represents a bullish wager in the marketplace, whereas a put signifies a bearish wager.
Whales promote BTC calls
Final week, a offered whale collected greater than $1.6 million in premium by promoting BTC calls towards a protracted place on the spot market. The so-called lined name technique concerned brief positions in March expiring name choices at strikes starting from $105,000 to $130,000.
The whale will maintain the bounty if BTC stays beneath $105,000 by the tip of March. Conversely, the lengthy place within the spot market will offset losses from a possible rally above $130,000.
One other widespread technique amongst merchants is to position sUSDe, a rewards-bearing token earned by staking Ethena’s USDe stablecoin, as collateral on Derive to borrow USDC at charges considerably decrease than different lending protocols. The identical is used to purchase sUSDe once more, and the cycle repeats.
The so-called DeFi carry trades generate double-digit returns because of the optimistic unfold between sUSDe’s annualized return of 28% and Derive’s sustained USDC lending price of round 18%.
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