Original Edit| Wu Says Blockchain

In this interview with Wu Says, Deribit CEO Luuk Strijers shared the company's journey from a niche platform focused on crypto options to a leader in institutional trading. Deribit is currently the largest cryptocurrency options exchange, with its BTC options trading volume accounting for over 80% of the total market volume and ETH options trading volume accounting for over 90% of the total market volume.

Luuk pointed out that Deribit's early entry, consistent product focus, and infrastructure advantages are key to its success against multi-product competitors like Binance. Luuk elaborated on the reasons behind the acquisition by Coinbase, including aligned strategic vision and synergies for global expansion. He also addressed challenges regarding compliance processes, particularly KYC, and emphasized that the platform will continue to focus on serving professional institutional investors.

Additionally, Luuk discussed his views on DeFi options platforms, future market expansion plans, product evolution directions (including the introduction of smaller contract units and longer-term options products), and Deribit's role and positioning as a core component of Coinbase's international options business.

Audio transcription was completed by GPT and may contain errors. Please listen to the full podcast on platforms like Xiaoyuzhou and YouTube. The author's views do not represent those of Wu Says, and readers are advised to strictly adhere to local laws and regulations.

Xiaoyuzhou: https://www.xiaoyuzhoufm.com/episodes/68eb796e224325ea70d4151a

YouTube: https://youtu.be/SrY5LtKonOE

Luuk's Personal Background and Entry into the Crypto Industry

Maodi: Good afternoon, Luuk. Thank you for taking the time to speak with us. We have been following Deribit's development for some time, and we are very pleased to have an in-depth conversation with you today. First, could you briefly introduce your personal background and career experience? What was your career path before joining Deribit? What prompted you to enter the crypto industry?

Luuk: Thank you for the invitation. First, regarding why I entered the crypto industry — I joined Deribit in 2019 as the Chief Business Officer. Before that, I worked at the Singapore Exchange for about five years. Prior to that, I worked at a Dutch options exchange for five to six years. My earliest career experience was in the capital markets in Amsterdam, where I worked for about five years; that was my first job, starting in 2004. Now, it has been 21 years, with about 15 to 16 years spent in exchange-related work.

I have been following traditional exchanges, options trading, and futures trading for nearly fifteen years. When the crypto boom started around 2016 to 2017, I was also doing some spot trading. At that time, I realized that this field contained enormous opportunities and potential, and I was very eager to explore further. It was this thought that ultimately brought me to Deribit. I officially joined in September 2019, and I have been the CEO for almost two years now.

Why Deribit Leads the Options Market Over Other Major Exchanges

Maodi: Deribit is a rather unique exchange; it was not founded by a Chinese team like many other platforms. In your view, why has Deribit been able to survive and succeed in this field? We know that many exchanges like Binance, Bybit, and OKX have also tried to launch options products but have never been able to capture market share from Deribit. I find this very interesting; they seem to do everything except break through in crypto options. Why do you think that is?

Luuk: I think there are several reasons. We started in 2016, which was very early. At that time, hardly anyone cared about crypto options. Bitcoin's volatility was much greater than it is now, so the premiums for options were also very high. At that time, there were no dedicated market makers for options, so the quality of the order book was also poor.

But over time, the market gradually grew. By 2018, we saw professional market makers starting to enter the space, with some teams spun off from traditional large options market-making institutions to establish trading teams specifically for crypto options. With their entry, the bid-ask spreads became narrower, and the depth of the order book improved, allowing us to gradually build a good reputation. The first batch of hedge funds and small to medium-sized institutions began to enter, and we grew little by little. This "first-mover advantage" continues to help us significantly. Many users choose Deribit because we were among the first serious players focused on options, and we have consistently maintained a high level of commitment to this sector.

Everything we do revolves around options. All our resources — including our team and infrastructure — are focused on options trading. For example, we do not use cloud services; instead, we deploy dedicated hardware ourselves, which allows for faster trade execution. We also offer features like multicast, which is an ultra-low latency binary data stream service that no other platform can achieve as quickly. We have market-making protection mechanisms and a range of other features that others have not developed because they do not need to — their product range is too broad.

You can think of those large platforms as "crypto supermarkets"; they do everything: spot, contracts, tokens, NFTs… Product managers are competing for resources every day: developing spot today, perpetual contracts tomorrow, and only occasionally focusing on options.

For us, it is always about options. Whether today, tomorrow, or the day after, we remain focused solely on options.

This focused mindset gives us an advantage and allows us to create a high-quality product. We have done everything we can to ensure that this product is of high quality, which is our uniqueness. Of course, I am not saying that other platforms have not done well; some platforms have indeed grown significantly, but we have intentionally chosen to take a vertical route. We have given up some businesses, such as not expanding the spot market significantly, but we have excelled in options.

Product Depth, Liquidity, or Institutional Trust? What Drives Deribit's Market Leadership

Maodi: Do you think Deribit's leading position in the crypto options space comes more from product depth, market liquidity, or from the trust of institutions and professional traders?

Luuk: As I mentioned earlier, our core advantage actually comes from our mindset of building high-quality products. This includes bringing in top-tier market makers, designing effective incentive mechanisms, ensuring sufficient market liquidity, and providing features like market-making protection. We have been working hard to compress bid-ask spreads and maintain the depth and quality of the order book.

But we do much more than just trading. We also have significant advantages in compliance and operations. We are regulated in multiple jurisdictions, and our platform architecture is specifically designed for institutional users. For example, we have SOC 2 Type II certification, which signifies that our operational security system has been audited and verified. We also have ISO certifications that comply with multiple industry standards. I believe many of the other exchanges you mentioned have not undergone financial audits, while we have been audited for five consecutive years.

These quality indicators have allowed us to stand out in the competition. Especially after the collapse of FTX, the market's focus on "quality" has become unprecedentedly important. Investors are starting to truly compare platforms; if you are going to place $100 million in assets on a platform, you must ensure it is safe, reliable, and professionally operated. That is why many people have chosen us.

Indeed, we may have lost a bit of market share in retail users or some simpler products. But on the institutional side, our growth has been very significant. Currently, about 85% of our trading volume comes from institutional investors, and I believe this proportion will continue to hold. Because we offer a highly professional product that attracts those who truly understand the field.

If you come from traditional finance and now want to start an asset management firm, brokerage, or other crypto-related financial business, what you are most familiar with and want to trade are still the things you have been doing for decades — options and futures. You will definitely ask, "Who does this best?" And the answer is us. Institutional clients seek quality and liquidity, and that is exactly what we excel at.

Acquisition by Coinbase: Why Deribit Chose to Sell and Future Synergistic Development

Maodi: We know that Coinbase acquired Deribit this year. Besides Coinbase, were there other potential buyers? I heard that Binance, Bybit, and GSR also expressed interest. Can you share more information? What was the reason behind Deribit making this decision? What were the core motivations? Why not choose to remain independent? From a strategic perspective, what changes should Deribit users expect after merging with Coinbase?

Luuk: This question contains many layers. Let me start from the beginning. Our founders initially hoped to cash out a portion of their shares, so we brought in an investment bank, Deloitte, and some other advisors to assist us in pushing this process forward.

But as time went on, the market situation changed, partly due to political factors like Trump's election. So, what started as a plan to sell a portion of shares gradually turned into an interest in selling the entire company. There were indeed multiple potential buyers, including some you mentioned. But I cannot confirm who specifically, as we signed confidentiality agreements, but I can say that there were indeed other options.

So why did we ultimately choose Coinbase? First, Coinbase is a publicly traded company, which makes the transaction process simpler and more transparent. They can pay with stock that has a clear present value — this is not a vague future promise, but real liquidity that can be realized now.

But perhaps more importantly, we share the same philosophy. Coinbase already has a great product that dominates the spot trading market. Their product construction approach is quality-oriented — no shortcuts, compliance first, and financial stability. They want to achieve global expansion, and so do we.

Deribit's product itself is strong, but it is a "niche" product; we are not a "one-stop supermarket" trading platform. Coinbase has a more comprehensive product line. When the two come together, we can provide a complete product architecture that can impact industry leaders in both quality and breadth. At the same time, we can start serving some user groups that we previously could not reach, such as the retail market.

So, when you combine Coinbase's brand, trust, compliance qualifications, and financial strength with Deribit's expertise in the options field, it creates a very powerful combination. This is also the main reason we ultimately chose Coinbase — of course, financial factors are an important part of it.

Will KYC Become More Complex After the Coinbase Acquisition? How Deribit Responds to User Compliance Complaints

Maodi: The next question might be a bit tricky. We have seen many users complain that Deribit's KYC process is too complicated, even to the point of being "painful." How do you respond to these criticisms? After the acquisition by Coinbase, will KYC and compliance become stricter?

Luuk: First of all, I want to apologize to all users — compliance is indeed a "bad" process. It is really difficult for us to make it a pleasant experience. While we try to make it as smooth and automated as possible, the reality is that global regulatory standards are constantly rising and will only become stricter in the future.

The challenge is how the platform adheres to these rules. For example, enhanced due diligence regarding the source of funds has become a mandatory requirement. We must ask users to provide proof of the source of funds, proof of residence, and various other documents. There are also language barriers. This is particularly difficult for Chinese users, as many government bills do not have addresses, and many bills are paid through platforms like WeChat, which is different from the global norm. In other regions, addresses are usually verified through bank statements, which is not common in China. Therefore, while this is a global issue, China does face some unique challenges.

So, will there be any changes after merging with Coinbase? Actually, there won't be much change — the rules that Coinbase follows are consistent with ours, and all regulated platforms must adhere to these rules. The more globalized the platform, the more complex compliance becomes. Coinbase itself is a global company, so the compliance challenges it faces are the same as ours.

In the past, Coinbase received more user complaints than we did, and they specifically formed a task force to address these issues. While I don't have exact statistics, to my knowledge, they have resolved about 90% of the backlog, and the entire process has become much smoother. Now, user wait times have decreased from a week to possibly just one hour. While I can't provide precise numbers, the general direction is correct.

So yes, this process will still feel annoying. But at the same time, we will respond to user issues more quickly. We will do our utmost to optimize the process and reduce unnecessary friction. Of course, there will still be some obstacles, but as long as you contact us or Coinbase through email, Telegram, Twitter, or other common channels, we will follow up and resolve the issues in a timely manner.

Users also need to understand that regulatory standards will only become stricter, and there is a rationale behind this. If we want blockchain and cryptocurrency to truly become globally recognized payment systems, we must ensure that every transaction is compliant — whether it is a transfer from a Chinese user to Europe or vice versa. For this reason, VASPs (Virtual Asset Service Providers) like us must verify user identities, sources of funds, transfer destinations, and ensure that the entire path is documented.

This is indeed cumbersome on an operational level, but as more VASPs — there are hundreds globally — gradually adopt the same standards, everything will become smoother. This way, when we need to verify user identities or transaction information with another platform, the process will be faster. The real problem arises when the other platform does not respond, and we have to investigate manually, which can take a lot of time.

Will There Be a Ban on Users from China or Hong Kong After Merging with Coinbase?

Maodi: After merging with Coinbase, will you ban users from certain countries or regions, such as mainland China or Hong Kong? How will you balance regulatory enforcement, trading speed, and user experience?

Luuk: That's a good question. We will not ban more regions. We will only maintain the current list of banned countries, which is a "standard banned country list" commonly followed by many exchanges globally. Mainland China and Hong Kong will not be banned.

Will Decentralized Platforms Challenge the Status of Centralized Exchanges?

Maodi: Recently, we have seen some on-chain futures platforms perform strongly, such as Hyperliquid. What do you think about this trend? Do you believe that decentralized options platforms could potentially challenge the dominance of centralized exchanges like Deribit in the future?

Luuk: The answer is "yes and no." I think Hyperliquid and similar platforms do an impressive job in terms of user interface, trading experience, and liquidity. However, the problem is that these platforms may serve 10,000 users today, and tomorrow another platform airdrops tokens, and those users switch over. The day after tomorrow, it could be another new platform. This constant migration leads to very low user loyalty and makes institutional adoption very difficult.

For an institution, to start trading on a platform, it must first conduct comprehensive KYC and due diligence. If users frequently jump between platforms, institutions cannot bear the costs and processes of repeatedly onboarding. This is a major reason why institutions are reluctant to engage deeply in DeFi.

The second, and perhaps most important reason, is the lack of KYC. If you do not know who the counterparty is, then in today's increasingly strict global regulatory environment, you cannot be compliant. Large institutions cannot afford such risks.

So, does DeFi have a future? Of course, it does. It is a remarkable concept that will continue to exist and succeed in some form. But will it be widely adopted by institutions? In its current form, I do not think so. However, I also do not believe that DeFi will disappear; it will continue to evolve, and more new projects will emerge. I sincerely wish Hyperliquid and similar platforms all the best; they are indeed doing well.

The bigger question is: will users remain loyal to a particular platform? Will standardized models and more refined KYC processes emerge in the future? Perhaps, but not yet.

Does DeFi pose a threat to centralized exchanges? To some extent, yes. Because those traders active in DeFi could have traded on centralized platforms like Deribit or Binance. Perhaps we cannot serve them, possibly due to regulatory restrictions, or because the products do not match, or maybe they currently prefer what DeFi offers, such as liquidity or certain features.

The reality is likely a mixed result of both. Yes, we have indeed lost some market share to DeFi, but that is not a bad thing. It is part of the natural evolution of the market. What these platforms are doing is meaningful, but they serve a completely different user group. Our institutional clients will not be moving to DeFi in the short term.

So, I do not believe that the future will consist solely of DeFi or solely of CeFi; both will continue to coexist and grow together.

Strategic Focus: Deribit's Development Path After Merging with Coinbase

Maodi: Looking ahead, what is Deribit's next strategic focus? Will you continue to concentrate on the options business within centralized exchanges, or do you plan to pursue broader innovations? Will Deribit be fully integrated into Coinbase, or will it maintain a certain degree of independence?

Luuk: Both aspects will be present. We will become Coinbase's international business unit. Coinbase's goal is global expansion, and we are part of their toolbox — or more accurately, now it is our toolbox, as we have essentially become a platform. Although we are currently operating independently, this will gradually change.

We are gradually integrating into the broader Coinbase organization — but not the U.S. business part. You need to view Coinbase as a structure composed of U.S. and non-U.S. parts, and we will represent the non-U.S. part. Of course, in the future, we may enter the U.S. market, but for now, our positioning is as Coinbase's international business arm.

This means we will still focus on the options business but will also expand into more products. We are expanding our product line and plan to integrate with Coinbase's existing products to provide a complete and comprehensive trading product suite.

In practical terms, for example, we will introduce Coinbase's high liquidity spot market to our users. Our own spot market is currently very small, so integrating Coinbase's spot liquidity will be a significant enhancement. In exchange, we will also provide Coinbase with our advantages in options liquidity and technical infrastructure.

These integrations are in planning — currently literally being mapped out on a whiteboard. A specific timeline has not yet been determined, but our goal is to roll out these integration projects over the next year.

The Role of the Asian Market in Deribit's Future Growth

Maodi: Do you think Asia, particularly Hong Kong or Singapore, will play a more important role in Deribit's expansion?

Luuk: I believe Asia is a very promising market in the cryptocurrency space. Not only retail users but also many family offices and hedge funds have shown strong interest. Overall, the risk appetite in Asia for investing and trading high-risk assets seems to be higher than in other parts of the world. So yes, I do believe that Asia holds more opportunities.

However, we also need to look at this issue from a compliance and licensing perspective. We need to clarify what we can and cannot do in various regions, where we can establish operations, and where we are restricted. Currently, we are evaluating how best to address these challenges.

Team Size and Corporate Culture: A Comparison of Deribit and Coinbase

Maodi: What is the work culture like at Deribit? How many employees do you currently have?

Luuk: We currently have about 175 employees. I am not sure about the exact number at Coinbase, but after our merger, there will be about 4,000 employees in total. This means Deribit accounts for 175 of those 4,000.

Most of Coinbase's employees are in the U.S., but they also have teams in Singapore, India, and London, covering both coasts of the U.S. Deribit is a smaller team; we have a relatively large office in Amsterdam, primarily responsible for technical work, including development, servers, systems, and security.

We will continue to regard Amsterdam as an important technical center, but relative to Coinbase's scale in the U.S., our portion will be much smaller. In the future, we will collaborate in appropriate areas while maintaining independent operations where necessary.

The Biggest Challenges Faced as CEO and Deribit's Core Competitiveness

Maodi: As CEO, what has been your biggest challenge in leading Deribit? If you had to summarize Deribit's core competitive advantage in one sentence, what would you say?

Luuk: Since I joined Deribit in 2019, the biggest challenge over the years has been dealing with various crises. We have experienced some technical issues, the most representative event being when we had Three Arrows Capital (3AC) as a shareholder, and they later went bankrupt. This brought a lot of complex issues — financial, legal, regulatory, and operational. We had to go through legal procedures, which put immense pressure on the team. It has been a bumpy road.

But we learned from it. I think we were too lenient with customers in the early days, granting credit limits that exceeded what was appropriate. It was a painful but valuable lesson. We became stronger as a result, our internal policies changed, and overall standards were raised. You could say that without these challenges, we might not have such strict operational discipline today — such as annual audits of financial reports, obtaining various certifications, and establishing compliance systems.

So, despite the ups and downs, these "stress tests" have made us more mature.

Deribit's strength comes not only from our products but also from how we treat our customers. Of course, we are not perfect and have had technical issues in the past. But we always take responsibility, compensate customers, and have never let users suffer losses due to our internal problems.

If I had to summarize, I would say: our advantage lies in having high-quality products and a trustworthy, dedicated team that maintains good relationships with customers. This is the core value of Deribit.

Looking ahead, our products may continue to evolve, but our service approach will not change — we will continue to provide a high-quality product experience and always put users first.

Additional Q&A Session

Does Deribit have a strategy to address market share challenges?

Luuk: First of all, we have recently set historical highs; these have been some of the best months since Deribit's inception. If you look at 2024 and 2025, we are breaking records one after another. So, the growth of IBIT is actually a good thing. They are targeting U.S. retail crypto options trading, which is precisely the service we currently cannot provide. So we sincerely wish them all the best because we are jointly driving the development of this industry, expanding market demand, and making options products more popular. They are indeed doing an excellent job serving a previously uncovered market.

There are indeed many people who want to trade, but we were unable to accommodate them at that time. Now they finally have the opportunity, which is a good thing. But this is not happening at the expense of our market share — our own business is also continuously innovating and reaching new highs.

So our current market share remains solid. We still hold about 75% to 80% of the options open interest. Yes, there are many competitors in the market — Binance, OKX, CME, etc. — but we are still the undisputed leader.

This is actually a comparison between different products. For example, ETFs are dollar-denominated derivatives, while our products are priced in Bitcoin. So while they fall under the same broad category, they are not exactly the same thing.

Currently, there are two mainstream options in the market: one is the offshore market we serve, and the other is the local user market like IBIT. The simultaneous growth of these two markets indicates that the opportunities in the entire industry are expanding. Bitcoin is reaching new highs, and I believe it will continue to rise. The market is expanding, demand is growing, and naturally, more participants are needed. In the past, U.S. users were blocked from participating, but now they are back.

So their success is good for us. They are doing well, and we will benefit as well. We have many common market makers, and pricing is generally similar. You can trade on IBIT and then hedge on Deribit, or vice versa. This creates arbitrage opportunities and new trading strategies, attracting more new participants to join this ecosystem.

Although Bloomberg's article suggests that this is eating into our share, that is not the case. I even think it is helping us. If IBIT continues to expand, I would be very happy — because their growth is also driving our growth. Conversely, if they suddenly collapse and lose half of their market share, it would negatively impact us. So their success is actually a positive for the entire ecosystem.

Does Deribit plan to launch more traditional assets like gold, silver, and other commodity derivatives?

Luuk: We actually tried to launch gold — but later took it down. We had it live for about a year, during which the market was still at a high point, but active demand just didn't materialize. So at this point, we believe the biggest opportunity still lies in digital assets.

We now support SOL and are planning to launch more crypto-native assets. If we compare ourselves to traditional exchanges, we can see a similar hierarchical structure — traditional exchanges have first-tier blue-chip indices, followed by some secondary products. For us, Bitcoin and Ethereum are first-tier products, but there are many other tokens worth trading. We may need to use incentives in the early stages to improve liquidity quality, such as offering incentives for the first six months and then observing market feedback.

If the market responds well, we could even launch index products — for example, a basket index product covering the top five, top ten, or top twenty crypto assets, allowing users to gain broader market exposure all at once.

But the core question is: should we bring traditional market products (like stocks, gold, and commodities) into the crypto world? Or should we continue to focus on creating the best crypto-native products? Traditional financial institutions are incorporating crypto assets into their products, but do we also need to reverse that and bring their assets into our space? This is a thought-provoking question.

At least for now, our first attempt to launch gold did not yield ideal results. You could say that in the future, we might try to launch stock options for companies like Tesla, allowing users to trade these assets using BTC or ETH as collateral, but that is still uncertain. Additionally, traditional markets are closed for two days a week, which also creates liquidity constraints over the weekend, presenting another significant challenge we need to consider.

That said, we are indeed exploring more new products. For example, we recently launched linear contracts for BTC and ETH. Before this, we only had inverse contracts — products priced in BTC or ETH; now we also offer options priced in USD, making it easier for users to price and settle.

More importantly, these new products can unlock additional customer yields. Currently, users holding these positions can earn an annualized yield of around 3.85%, which is very attractive and has inspired some new trading strategies.

Future plans? We hope to have "both" — more crypto assets and more types of product innovations.

With the rise in Bitcoin prices, is Deribit considering lowering the minimum trading unit for contracts to improve user accessibility?

Luuk: You are absolutely right. This is also the reason we launched linear contracts with smaller contract sizes. Yes, we are now also considering whether to make similar adjustments to inverse contracts.

Does Deribit plan to launch long-term options (LEAPs) with maturities longer than one year?

Luuk: We do occasionally receive inquiries about this. But if you look at the actual trading volume and liquidity, it is very concentrated in short-term maturities — mainly focused on the current month and the next quarter. Institutions sometimes use six-month maturities in structured products, but even one-year options account for a very small proportion of the overall trading volume. Two-year options are even more niche.

So I don't think we will make it a regular listed product. However, one option we are considering is to provide them through an RFQ (Request-for-Quote) mechanism.

This way, market makers do not need to quote prices for such maturities around the clock, but if you have a trading need, you can send a request for a quote, and we will provide a price. If you are satisfied with the price, you can execute the trade.

This allows users to gain trading opportunities for long-term exposure without relying on around-the-clock order book liquidity — because most market makers are not willing to quote a 20% spread for a two-year maturity, especially when hardly anyone is trading.

So the direction we are currently exploring is to create an RFQ trading area, somewhat similar to CME's approach for some illiquid or customized products.

Why was Deribit able to attract Coinbase — is it due to its stronger institutional-oriented culture?

Luuk: Yes, this is indeed one of the main reasons for our collaboration. As I mentioned earlier, it ultimately comes down to a fit in philosophy. Both Deribit and Coinbase want to develop in an institutional manner. This means we prioritize quality, establish a comprehensive customer risk management system, conduct stress tests on our systems, ensure full compliance, and perform all necessary KYC checks.

Even though we provide flexible trading tools for traders, we still insist on offering services in the most professional and compliant manner.

This philosophy is reflected in every aspect — our hardware architecture, software systems, product design, KOL collaboration strategies, and retail product setups, all of which demonstrate a path that is distinctly different from platforms focused on retail.

I believe Coinbase shares this mindset as well. They also have many talents with institutional backgrounds — some come from banks or brokerages. I am not saying we only hire people with such backgrounds, but the combination of traditional financial experience and crypto-native understanding is one of the reasons we are able to excel.

Our team is made up of people who have genuinely done these things and know how to build and operate financial infrastructure. This is also a key reason why we chose to collaborate with Coinbase.

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