Pinned Tweet
The vision for Derive - which a lot of people get wrong - is not just onchain Deribit.
We’re building the infinite payoff factory: any payoff, on any asset, 24/7.
Tailored yield generation, hedging, and speculation at institutional scale that can wrap around any high quality asset, be repackaged, and distributed wherever it’s needed across the Internet Financial System.
We’ve positioned Derive intentionally. Options venues take years of expertise, liquidity building, and grinding BD to reach competitive depth. That work is all coming together now.
Teams can integrate with Derive, add their own layer on top, and deliver differentiated financial products to their users, without spending years doing the most difficult parts.
This is why 20+ teams are already building on Derive. As more high quality assets come onchain at scale, we are readying our infrastructure for a world where that number to grow into the thousands.
We’re building the infinite payoff factory: any payoff, on any asset, 24/7.
Tailored yield generation, hedging, and speculation at institutional scale that can wrap around any high quality asset, be repackaged, and distributed wherever it’s needed across the Internet Financial System.
We’ve positioned Derive intentionally. Options venues take years of expertise, liquidity building, and grinding BD to reach competitive depth. That work is all coming together now.
Teams can integrate with Derive, add their own layer on top, and deliver differentiated financial products to their users, without spending years doing the most difficult parts.
This is why 20+ teams are already building on Derive. As more high quality assets come onchain at scale, we are readying our infrastructure for a world where that number to grow into the thousands.
14
23
227
78,597
Thesis playing out - I don't even think we spoke to the Virtuals team on this one, extremely cool integration!!
Derive options can now run on autopilot.
Your BTC and ETH, covered before every Fed, CPI and jobs release. No calendar, no options math. Tell Butler the drop you can take. It does the rest on @DeriveXYZ, after one approval. That’s it.
Join the private beta: butler.virtuals.io
1
7
115
3,598
Over the last 30 days, Derive has remained over 90% of the onchain options market. In that same time frame, we’ve done about 5% of Deribit’s options volumes, up from 0.1% a year ago.
It’s difficult to build momentum in this category because of the uniquely strong network effects Users and market makers hold positions and collateral on exchange for the duration of an option, often many months. The difficulty and cost of integration are a liquidity provider is an order of magnitude higher than perps. Options markets are also the last vertical to mature in any asset class.
Onchain has finally broken the dam - and Derive, alongside all of our builders and partners, has a chance to redefine the options category, first in crypto, and then beyond.
The tailwinds are enormous, and still underappreciated by most people I speak with.
1. Bringing options liquidity onchain unlocks more functionality than any other vertical: programmable, composable building blocks for precise, tailored yield generation, hedging, and speculative trades. One click hedges embedded in every brokerage and fintech, yield generation strategies with verifiable backtests and transparent risk, on any asset, new social trading experiences built using the kinds of trades only options can support.
2. AI for UX: the biggest barrier to entry to trading options is understanding. 2026 has seen a step function change in how models reason about options. This has yet to filter through to UX, but is coming. People shouldn’t trade options if they don’t understand them. But - given they want to express an opinion about the market - they should be able to find the best way to translate that into a trade. Options are often the best way to do so.
3. AI for agentic trading: options give you thousands of ways to express a view across strikes, expiries and structures. For many traders this is overwhelming, but for agents, it’s a much more useful set of choices. My wager is that agents will prefer specificity and precision when executing trades: not just whether an asset goes up or down, but how far, by when, and with how much risk. Options are the answer.
These tailwinds are strengthening just as our liquidity hits an inflection point. Big integrations take time to come to fruition, but we’re seeing the results month by month, with many more in the pipeline. At the same time, we’ve completed our biggest infrastructure upgrade in 3 years, taking what was already a leading onchain product into what I believe is the best options infrastructure anywhere.
We have so much more work to do, and will be constantly taking feedback, iterating on the product, and ensuring that every dollar of liquidity that onboards to Derive is earned. But we really are only at the dawn of the last major trading vertical to move onchain, and in my opinion, it will be the largest.
It’s difficult to build momentum in this category because of the uniquely strong network effects Users and market makers hold positions and collateral on exchange for the duration of an option, often many months. The difficulty and cost of integration are a liquidity provider is an order of magnitude higher than perps. Options markets are also the last vertical to mature in any asset class.
Onchain has finally broken the dam - and Derive, alongside all of our builders and partners, has a chance to redefine the options category, first in crypto, and then beyond.
The tailwinds are enormous, and still underappreciated by most people I speak with.
1. Bringing options liquidity onchain unlocks more functionality than any other vertical: programmable, composable building blocks for precise, tailored yield generation, hedging, and speculative trades. One click hedges embedded in every brokerage and fintech, yield generation strategies with verifiable backtests and transparent risk, on any asset, new social trading experiences built using the kinds of trades only options can support.
2. AI for UX: the biggest barrier to entry to trading options is understanding. 2026 has seen a step function change in how models reason about options. This has yet to filter through to UX, but is coming. People shouldn’t trade options if they don’t understand them. But - given they want to express an opinion about the market - they should be able to find the best way to translate that into a trade. Options are often the best way to do so.
3. AI for agentic trading: options give you thousands of ways to express a view across strikes, expiries and structures. For many traders this is overwhelming, but for agents, it’s a much more useful set of choices. My wager is that agents will prefer specificity and precision when executing trades: not just whether an asset goes up or down, but how far, by when, and with how much risk. Options are the answer.
These tailwinds are strengthening just as our liquidity hits an inflection point. Big integrations take time to come to fruition, but we’re seeing the results month by month, with many more in the pipeline. At the same time, we’ve completed our biggest infrastructure upgrade in 3 years, taking what was already a leading onchain product into what I believe is the best options infrastructure anywhere.
We have so much more work to do, and will be constantly taking feedback, iterating on the product, and ensuring that every dollar of liquidity that onboards to Derive is earned. But we really are only at the dawn of the last major trading vertical to move onchain, and in my opinion, it will be the largest.
18
30
190
14,602
Continues to surprise me how quickly $HYPE has settled in to being a ~60 vol asset. (ETH is 51 vol out to end of year atm - and has a much longer history!).
The Christmas board $100 strike is offered at $2.86 (~63% IV). Rough rule of thumb is that implies ~3% average daily o low? Buy the calls and make a 7x if $HYPE goes to $120 by December 25.
Think that's too high? Sell the calls and collect ~20% annualized in USD premiums (and give up your upside past $100).
The Christmas board $100 strike is offered at $2.86 (~63% IV). Rough rule of thumb is that implies ~3% average daily o low? Buy the calls and make a 7x if $HYPE goes to $120 by December 25.
Think that's too high? Sell the calls and collect ~20% annualized in USD premiums (and give up your upside past $100).
8
6
100
5,415
Honoured and thrilled to see all of the energy from builders on top of Derive v3.
V3 was made for builders. Composable onchain options is a blue ocean for innovative, powerful new products that are an upgrade over the traditional financial system.
In terms of the areas I am most excited about - it's products that reach new audiences, people who have never traded an option in their lives. We now have the infrastructure to build for them.
A few areas I’d love to see people building:
• Structured products that use options to generate yield on RWAs.
• Hyperlocal/regional user interfaces that tailor the trading experience and GTM to specific geographies.
• Simple UIs and novel retail trading experiences that reach people on TikTok and YouTube who have never touched a wallet or CEX in their lives. There is a much bigger world out there than CT.
• Social trading using options. This is possibly one of the biggest unexplored areas - every options trade is a specific story about the future, and you can tell richer, more interesting stories with payoff structures that simply aren't possible with any other instrument.
Simple UX is a big part of unlocking this. But the question I'd encourage people to start with - who are the net new users you are bringing into the market and how are you actually going to reach them? I’m most excited about experiences that grow the audience for options beyond the people already trading on Derive.
As for Derive? Yes we hear all of you on the UI and user feedback. We are working on simpler, more accessible modes for Derive natively on mobile + desktop (as any complete exchange requires) - but we will not be building all of these new experiences ourselves. Our focus is building the core infrastructure and liquidity necessary to support products built using options, 24/7, on any asset.
Options are the most composable financial primitive, and I think the category stands the most to gain from migrating onchain out of any financial vertical. Push boundaries, bring in new users, and get creative - I think this is the biggest opportunity in crypto right now.
If you're building for a new audience on Derive pls get in touch, would love to hear what you're working on.
V3 was made for builders. Composable onchain options is a blue ocean for innovative, powerful new products that are an upgrade over the traditional financial system.
In terms of the areas I am most excited about - it's products that reach new audiences, people who have never traded an option in their lives. We now have the infrastructure to build for them.
A few areas I’d love to see people building:
• Structured products that use options to generate yield on RWAs.
• Hyperlocal/regional user interfaces that tailor the trading experience and GTM to specific geographies.
• Simple UIs and novel retail trading experiences that reach people on TikTok and YouTube who have never touched a wallet or CEX in their lives. There is a much bigger world out there than CT.
• Social trading using options. This is possibly one of the biggest unexplored areas - every options trade is a specific story about the future, and you can tell richer, more interesting stories with payoff structures that simply aren't possible with any other instrument.
Simple UX is a big part of unlocking this. But the question I'd encourage people to start with - who are the net new users you are bringing into the market and how are you actually going to reach them? I’m most excited about experiences that grow the audience for options beyond the people already trading on Derive.
As for Derive? Yes we hear all of you on the UI and user feedback. We are working on simpler, more accessible modes for Derive natively on mobile + desktop (as any complete exchange requires) - but we will not be building all of these new experiences ourselves. Our focus is building the core infrastructure and liquidity necessary to support products built using options, 24/7, on any asset.
Options are the most composable financial primitive, and I think the category stands the most to gain from migrating onchain out of any financial vertical. Push boundaries, bring in new users, and get creative - I think this is the biggest opportunity in crypto right now.
If you're building for a new audience on Derive pls get in touch, would love to hear what you're working on.
V3 is live, and the first builders are already emerging. Vaults and RWAs launch soon to fuel the fire.
Options are here to stay and they'll take many forms; yield generation, hedging and chasing outsized returns. They'll be traded through institutional retail-friendly interfaces wallets and incorporated into structured yield products offered by Neobanks.
The pie is growing, and there's room to build something big.
16
11
141
4,709
Nick Forster | Derive retweeted
HEAT is live.
Options trading built around the chart experience.
Pick a direction, drag a strike, see what you make if price ends there. Watch what other traders are doing, copy the biggest winners, and post about your trades!
How it works ↓
Options trading built around the chart experience.
Pick a direction, drag a strike, see what you make if price ends there. Watch what other traders are doing, copy the biggest winners, and post about your trades!
How it works ↓
27
12
185
65,517
A proposal 6 years in the making - worth reviewing
A new governance proposal to pursue Derive's expansion into US-regulated derivatives markets is live on the Derive forum.
Community members are encouraged to review the proposal and join the discussion: forums.derive.xyz/t/dip-expand-d…
11
11
193
9,546
v3 is Josh's baby - he is a masterful engineer and executor, and has worked so hard to deliver a protocol and architecture that will power Derive's next chapter.
It's a privilege to work with him. He has the rare ability of explaining deeply technical concepts in simple language, and is criminally underfollowed.
Highly recommend watching him lay out the full v3 thesis here.
It's a privilege to work with him. He has the rare ability of explaining deeply technical concepts in simple language, and is criminally underfollowed.
Highly recommend watching him lay out the full v3 thesis here.
A closer look at our thinking behind V3.
Our CTO @josh_pwrk sat down with @Nomaticcap to talk through how we got here, why we chose Ethereum and ZK, and where we think onchain finance is headed.
We've spent five years building onchain options and learning from the traders who he lessons behind V3 and why we want to make it easier for others to build alongside us.
Watch the full conversation below.
4
6
117
4,150
Believe it or not this was my first ever time hosting an event for Derive. Better late than never. What a privilege it was to spend the night with insanely talented builders, anons, partners, and friends. The energy, creativity and talent coalescing around onchain options is lt so far in our history. Headwinds have flipped to tailwinds, and the Derive community is ready to take full advantage. Thank you to everyone who came out and to the team at STS for being wonderful cohosts, we have so much more to come.
20
9
201
7,269
The Derive engineering team went through the wringer over the last few weeks (and really the last 8 months) to pull this off without a hitch. They are truly world class.
V3 is the infinite payoff factory, and I couldn’t be more excited that it’s live.
V3 is the infinite payoff factory, and I couldn’t be more excited that it’s live.
Migration complete. Derive is running on its new V3 architecture.
Market makers and traders are reconnecting as liquidity builds back up. Withdrawals for some assets may take up to a week to resume.
We'll share more about V3 in the coming days, including a closer look at the at’s next for users and builders.
11
9
183
4,018
Nick Forster | Derive retweeted
We've spoken to dozens of traders.
Gathered feedback from noobs, options-curious DeFi users, and the biggest @DeriveXYZ traders.
Your feedback and hours of iteration have shaped Heat v2’s updated UI.
Sneak peek ↓
Gathered feedback from noobs, options-curious DeFi users, and the biggest @DeriveXYZ traders.
Your feedback and hours of iteration have shaped Heat v2’s updated UI.
Sneak peek ↓
Introducing HEAT v2
As one of the original builders in the @DeriveXYZ ecosystem, we are incredibly excited to announce our social trading app for options coming with Derive V3!
Place option trades by simply interacting with the chart, follow and copy big traders and more!
5
10
69
5,582
Poetic that v2 managed to cross $40B in lifetime volume in the week before v3.
We launched it all the way back in December 2023, which feels like a lifetime ago in so many ways (v2 predates even the restaking mania bullrun of 2024, RIP Blast).
It has taken multiple crypto cycles for onchain options to break out, but in so many ways this growth over the last couple of months is right on time.
Uniswap in 2020 ~7 years after crypto spot trading started gaining broader traction. Onchain perps broke out via DyDx and then Hyperliquid in 2023/24 ~7 years after Bitmex, and now onchain options are starting to break out in 2026, ~7 years after Deribit hit growth.
Options are the last vertical to mature onchain, and I think there is a strong case that they will be the biggest. Will save that post for another day.
We launched it all the way back in December 2023, which feels like a lifetime ago in so many ways (v2 predates even the restaking mania bullrun of 2024, RIP Blast).
It has taken multiple crypto cycles for onchain options to break out, but in so many ways this growth over the last couple of months is right on time.
Uniswap in 2020 ~7 years after crypto spot trading started gaining broader traction. Onchain perps broke out via DyDx and then Hyperliquid in 2023/24 ~7 years after Bitmex, and now onchain options are starting to break out in 2026, ~7 years after Deribit hit growth.
Options are the last vertical to mature onchain, and I think there is a strong case that they will be the biggest. Will save that post for another day.
Exciting weekend flows: $450M+ notional in 24 hours.
92.4% of all onchain options premium volume.
Open interest back above $4.58B.
Cumulative volume crossed $40B all time. 🏆
V3 is coming, migration 6 OCT📝
8
10
127
6,079
- ATHs in options volumes
- 8x YoY volume growth
- 5x YoY fees growth
- ~90% onchain options market share
Incredible to see people discover Derive v2 after nearly 3 years in production. But v3 is near, and it is lightyears better than v2.
We have taken all of the learnings of the bleeding edge of internet finance and poured it into v3. It incorporates everything we’ve learned from traders, market makers, builders, and the markets themselves. I can't wait to show you what we've built.
In the meantime, please keep the feedback coming (traders, builders and MMs) - we aren't perfect but we will work hard to address issues as quickly as we can.
Grateful to all those who have believed in us to this point, we have much more to prove.
- 8x YoY volume growth
- 5x YoY fees growth
- ~90% onchain options market share
Incredible to see people discover Derive v2 after nearly 3 years in production. But v3 is near, and it is lightyears better than v2.
We have taken all of the learnings of the bleeding edge of internet finance and poured it into v3. It incorporates everything we’ve learned from traders, market makers, builders, and the markets themselves. I can't wait to show you what we've built.
In the meantime, please keep the feedback coming (traders, builders and MMs) - we aren't perfect but we will work hard to address issues as quickly as we can.
Grateful to all those who have believed in us to this point, we have much more to prove.
24
27
191
24,030
Nick Forster | Derive retweeted
Calling all builders 🔨
Your frontend, your users, Derive's options liquidity underneath.
Build or integrate the next great options product → docs.derive.xyz
Here's what V3 means in practice ↓
Your frontend, your users, Derive's options liquidity underneath.
Build or integrate the next great options product → docs.derive.xyz
Here's what V3 means in practice ↓
40
27
333
42,323
big opportunity to build options on @DeriveXYZ
big opportunity to build options on @base
12
12
217
12,256
You can express almost any market view with options, and this is an extremely cool product built from that insight. Congrats on the launch @Charlie85270R!
With the recent surge of @DeriveXYZ I think it's a good moment to release the first beta version of Tacticalls.xyz🎉
Options are still very complicated to understand and trade, Tacticalls aims to simplify this.
A social app on top of the $DERIVE infrastructure.
A kind of fomo but for options.
More details 🧵 👇
2
2
57
5,564
A massive trade of 18,140x ETH 2850/3000/3100 butterflies just hit the tape on Derive, expiring this Friday Sep 24
Pays ~$270k usd in premiums to win $2.43m (!!) if $ETH pins $3,000 on Friday's expiry.
Pays ~$270k usd in premiums to win $2.43m (!!) if $ETH pins $3,000 on Friday's expiry.
18
11
164
11,929
Wish I'd written this. v3 brings Derive's nearly 6 year old thesis to life:
- Blockchains are the ultimate rail for finance (24/7, programmable, open)
- Options are the ultimate money lego for blockchains (building blocks for any payoff, tailorable, the most programmable derivative)
The infinite payoff factory
- Blockchains are the ultimate rail for finance (24/7, programmable, open)
- Options are the ultimate money lego for blockchains (building blocks for any payoff, tailorable, the most programmable derivative)
The infinite payoff factory
The most interesting part of @DeriveXYZ V3 has very little to do with people trading directly on Derive.
It’s about distribution.
Hyperliquid already showed what can happen when an exchange becomes infrastructure for other apps:
• Wallets like Phantom and Rabby own the elationship.
• Hyperliquid provides the trading infrastructure.
• The apps get paid for bringing the flow.
And I think this is one of the more interesting ways to think about Derive V3.
Derive doesn’t necessarily need every future options trader to become a direct Derive user either. It can become the options engine running underneath other products.
Derive already has Builder Codes, so apps can route trades through Derive and monetize the activity they generate.
V3 then makes that integration layer much more powerful by exposing the infrastructure builders need to create their own options products and UX.
Imagine a wallet showing: “Protect my ETH from falling below $3,000.” The user doesn’t need to know they’re buying a put.
Or a yield app showing: “Earn yield while being willing to sell ETH at $6,000.”
Underneath, it can package an options strategy.
This matters because options have a huge UX problem. Strikes, expiries, implied volatility, Greeks, strategy combinations.
Most users don’t want to learn all of that. But maybe the answer isn’t teaching everyone how to use an options chain, it’s hiding the options chain completely.
Let builders turn complex options positions into simple products users already understand:
• Protection
• Yield
• Directional bets
• Structured payoffs
And let Derive handle the liquidity, execution and risk engine underneath.
Hyperliquid proved the builder distribution model can work for perps. Derive now has a chance to test what that same model looks like for onchain options.
13
24
201
16,123
$ZEC options charts looking like early hyperliquid:native on Derive
At the money implied vol for Oct 30th is at 110%, roughly implying avg daily move of 5.5% til then
Skew-wise the 20d calls are trading over, meaning traders expect more volatility to the upside.
We've seen s in the last couple days buy puts and sell calls (risk reversal) to take advantage of the cheaper puts relative to calls for insurance in case of a dip.
At the money implied vol for Oct 30th is at 110%, roughly implying avg daily move of 5.5% til then
Skew-wise the 20d calls are trading over, meaning traders expect more volatility to the upside.
We've seen s in the last couple days buy puts and sell calls (risk reversal) to take advantage of the cheaper puts relative to calls for insurance in case of a dip.
6
9
96
11,222
Makes me really happy to see so many finding out about Derive for the first time this week.
The team and I love the feedback, keep it coming. Here are some thoughts:
1. “The UI/UX is too complicated for beginners” - this is fair, the UI is deliberately geared towards experienced options traders and institutions. To date this has been the overwhelming majority of our users and volume. For now, you can find the ‘strategy builder’ feature in the RFQ tab which helps craft options strategies according to your market view, for a simpler experience.
More importantly - we don't want to build every retail options experience ourselves. We want hundreds of teams building them on top of Derive. Because options are so tailorable (extremely precise, tailorable strategies for any asset over any duration), there are going to be a ton of different flavours of options based products that are created and successful, across retail trading, structured products, quantitative investment strategies, and vaults. I think that this is one of the biggest unexplored businesses you can build in crypto ATM. V3 is built to support seamless integrations for builders who want to do this. I know of 5+ great teams already working on it. Reach out to me directly if this is something you are doing, and check out the docs here: docs.derive.xyz.
2. “My RFQ order isn’t getting a quote/the quote isn’t great.” Orders over ~5m notional or on longer tail alts might need 5-10 minutes for market makers to respond manually. We have a few great MMs that are on autoquotes, but that isn’t (yet) 24/7. So if you don’t love the quote or it looks far from the mark, give it 5-10 minutes when using RFQ (you can also go to the orderbook for instant fills). We have onboarded some major new MMs just this week, so you can expect this to continuously improve. It is our top priority. Keep the feedback coming here.
3. ‘I have a position that has gone deep ITM and I want to get out and liquidity is bad on the orderbook/RFQ.’ Hear you on this - it is one of the tougher challenges in options to build true 24/7 liquidity on deep ITM/OTM strikes with very little time to expiry. We have some programs rolling out for MMers to incentivise liquidity and improve spreads on these. Feel free to reach out to the team directly if you can’t find the quote (you can also delta hedge with perps, which get cross-margined against your options position). Working on it.
4. Wen more RWAs? Very soon
Please keep the feedback coming, we are working on a number of different fronts atm with all of the new demand, so if you see something not addressed just know that we hear it and it will be addressed.
The team and I love the feedback, keep it coming. Here are some thoughts:
1. “The UI/UX is too complicated for beginners” - this is fair, the UI is deliberately geared towards experienced options traders and institutions. To date this has been the overwhelming majority of our users and volume. For now, you can find the ‘strategy builder’ feature in the RFQ tab which helps craft options strategies according to your market view, for a simpler experience.
More importantly - we don't want to build every retail options experience ourselves. We want hundreds of teams building them on top of Derive. Because options are so tailorable (extremely precise, tailorable strategies for any asset over any duration), there are going to be a ton of different flavours of options based products that are created and successful, across retail trading, structured products, quantitative investment strategies, and vaults. I think that this is one of the biggest unexplored businesses you can build in crypto ATM. V3 is built to support seamless integrations for builders who want to do this. I know of 5+ great teams already working on it. Reach out to me directly if this is something you are doing, and check out the docs here: docs.derive.xyz.
2. “My RFQ order isn’t getting a quote/the quote isn’t great.” Orders over ~5m notional or on longer tail alts might need 5-10 minutes for market makers to respond manually. We have a few great MMs that are on autoquotes, but that isn’t (yet) 24/7. So if you don’t love the quote or it looks far from the mark, give it 5-10 minutes when using RFQ (you can also go to the orderbook for instant fills). We have onboarded some major new MMs just this week, so you can expect this to continuously improve. It is our top priority. Keep the feedback coming here.
3. ‘I have a position that has gone deep ITM and I want to get out and liquidity is bad on the orderbook/RFQ.’ Hear you on this - it is one of the tougher challenges in options to build true 24/7 liquidity on deep ITM/OTM strikes with very little time to expiry. We have some programs rolling out for MMers to incentivise liquidity and improve spreads on these. Feel free to reach out to the team directly if you can’t find the quote (you can also delta hedge with perps, which get cross-margined against your options position). Working on it.
4. Wen more RWAs? Very soon
Please keep the feedback coming, we are working on a number of different fronts atm with all of the new demand, so if you see something not addressed just know that we hear it and it will be addressed.
18
18
186
12,465