Derive dominates the market, with Paradex and Hypercall entering the fray to initiate competition.

Written by: Pink Brains

Translated by: Luffy, Foresight News

In September 2026, the nominal trading volume of on-chain options reached between 4.8 billion and 5.6 billion dollars. A month earlier, this figure was only 1.9 billion dollars. The actual cash paid for contracts, that is, the premiums, grew by one-third to reach 85 million dollars. Open interest also surged to nearly 2.5 billion dollars by the end of September, falling back to about 1.75 billion dollars as of October 12, with over 90% of the open interest concentrated on a single platform.

Remember that in mid-2025, Hyperliquid's market share in the on-chain perpetual contract market exceeded 70%. However, after the market capitalization of the HYPE token surpassed 15 billion dollars, Aster and Lighter compressed its market share to below 40% in just four months. The on-chain options sector may soon experience a similar situation.

For most of this cycle, on-chain options were widely regarded as a necessary derivative, but no project truly excelled until Derive emerged. The daily trading volume of on-chain perpetual contracts is currently around 21 billion dollars; even during record-high months, the trading volume of on-chain options is less than 1% of that of perpetual contracts.

This article will introduce the current operational mechanisms of on-chain options, the reasons for the explosion in trading volume in 2026, leading options trading platforms, existing shortcomings in the sector, and will present some simple trading strategies for beginners.

How On-Chain Options Work

Options grant the holder rights, but not obligations, to buy (call options) or sell (put options) an asset at a predetermined price on a specified date. You must pay a premium to acquire this right. The seller of the option collects this premium and assumes the obligation to perform.

If you are the buyer, your maximum loss is limited to this premium. Even if the market retracts by 20%, as long as your broader judgment is correct, you will not be liquidated. This is the core attraction of options compared to perpetual contracts.

On-chain options platforms are divided into three categories:

• Order book exchanges. Market makers post buy and sell quotes; if your trade size is large or you are executing a multi-leg transaction (note: a multi-leg transaction refers to establishing two or more positions in the same underlying asset simultaneously to form a combination strategy), you can initiate a request for quote (RFQ), where multiple market makers will quote simultaneously, allowing for a single transaction. The matching occurs off-chain to ensure speed, while funds, margins, and clearing logic remain on-chain. Derive, Paradex, Hypercall, and Aevo all belong to this category.
• Vaults. You deposit an asset, choose a strike price above the current price, and then sell a corresponding call option. Market makers or protocol liquidity pools buy this option and hedge against it. You immediately receive the premium denominated in USD; upon expiration, you can either retain the asset or settle the asset at the strike price. Rysk employs this model, where users can only act as option sellers.
• Simple applications. The interface only displays price direction and trade size, and the application automatically buys call or put options for users, hiding the strike price and expiration date. Dream is an example of this product.

Where can you track on-chain options trading data?

We recommend the website: onchaingreeks.xyz. It focuses on three key metrics of the platforms: nominal trading volume (contract face value), premiums (actual cash turnover), and open interest (existing positions).

Another useful website is: opshnz.com. It was independently built by a Korean developer, updated daily, and is beginner-friendly for options trading. You can:

• View around 40 options projects in an overview format, categorized by public chain, displaying real-time prices and marking projects that have not yet issued tokens.
• Filter according to needs: earn yields, simple speculative bets, or professional trading.
• Access simplified trading operation guides during CPI, FOMC, and liquidation events, matching suitable trading platforms.
• Track incentive activities and new projects launched weekly.

Why Trading Volume Will Rise in 2026

Bringing options on-chain is not a new concept, but early solutions from 2021 to 2022 had many flaws, ultimately leading to their failure. AMM options liquidity pools forced liquidity providers to bear unhedgeable volatility risks; different strike prices and expiration dates formed independent markets, resulting in thin liquidity; each market fluctuation required market makers to re-quote hundreds of contracts, and each quote incurred Gas fees; there was no portfolio margining mechanism, and the margin required for hedged positions was the same as for naked positions.

Now, with technological iteration, many flaws are gradually being addressed.

Application chains and Rollup technology enable an off-chain matching + on-chain settlement order book model with low enough costs to become feasible.

• Professional market makers have entered the scene, with platforms offering incentives to retain quotes. FalconX began quoting on Derive from October 2025; Derive's institutional trading incentive program subsidizes market makers for consistently placing orders.
• Portfolio margining is implemented, allowing call options, short perpetual contracts, and spot positions to coexist within the same account, offsetting risks against each other.
• Institutions have developed a demand for decentralized exchanges. Coinbase acquired Deribit. Documentation related to Derive shows that following this acquisition, Asian trading departments began seeking neutral trading venues; during the market crash on October 10, 2025, Derive's order book maintained normal operation. Paradex recently integrated Paradigm's RFQ network into its own public chain; after integration, open interest of options grew from nearly 0 to over 250 million dollars in three weeks.

Leading On-Chain Options Trading Platforms

Derive

From a market maker's perspective, Derive's trading platform is similar to Deribit. Order book matching occurs off-chain, with large or multi-leg strategies executing RFQs, allowing multiple market makers to provide a complete set of quotes in one go for traders to execute with a single click. Settlement, margin, and clearing are all executed on-chain.

Derive has now upgraded to version V3. User funds are held in Ethereum L1, and margin and settlement operate through zero-knowledge proofs validated on Ethereum, allowing ETH and BTC to be combined for margin calculations, supporting lending of ETH, WBTC, and HYPE, with external teams able to deploy fee-generating vaults without coding.

Bulk orders of 1000 BTC, the HYPE calendar spread strategy, and March 2027 ETH call options can all be executed because paid market makers will provide quotes. Options and perpetual contracts share the same account, which is significant: market makers selling call options need to hedge continuously, and Derive allows them to complete this hedging on the same platform, avoiding cross-platform requirements and repeated margin payments.

90% of the entire industry’s on-chain options open interest and premiums are concentrated on this platform. It is also the only platform where the share of premiums in the market exceeds the share of nominal trading volume, representing that traders are buying real options risk exposure rather than repeatedly trading short-term cheap contracts to inflate trading volume. An article by Alea Research mentions that in 2026, traders achieving equivalent risk exposure on Derive will incur costs about 40% higher than on Deribit. In other words, Derive excels in trading volume rather than price. The initial performance following the V3 launch is worth closely observing.

Paradex

Paradex is a Starknet application chain incubated by Paradigm. Paradigm's institutional RFQ network handles about a quarter of Deribit's bulk order flow. In mid-September 2026, the platform launched fixed-term options, directly using Deribit’s trading norms, supporting daily, weekly, and monthly expirations, USDC cash settlements, categorizing strike prices by Delta, and integrating Paradigm's counterparties.

The open interest of options on Paradex surged from nearly 0 to over 250 million dollars in three weeks, then significantly retracted, and began to rise again in early October. Attracting trading volume and retaining it is a dual test, and Paradex currently has only passed the first hurdle.

RFQ tools display Deribit prices as a benchmark, effectively linking to Deribit's bulk trading counter. Multi-leg bulk orders support institutional-level transactions, while retail trading incurs zero fees, with the same cross-margin account covering perpetuals, options, and spot markets, including assets like gold, oil, and the S&P 500. Reports indicate that in September, a massive ETH order on Paradex executed at a better price than Deribit.

Hypercall

Hypercall is an options product created by Synapse Labs, transitioning from the cross-chain bridge sector, built on Hyperliquid. Launched in June 2026, it first offered SpaceX options, followed by additional offerings including S&P 500, Nvidia, Micron Technology, Alibaba, and SanDisk, with plans to launch LTC and DOGE contracts within the year. The contracts support fractionalization, with USDC settlements. Option sellers can complete Delta hedging within Hyperliquid’s perpetual contract market in the same margin account. This mechanism cannot be replicated by other platforms unless authorized by Hyperliquid.

It is the only platform where you can purchase options for unlisted companies without KYC, starting with a minimum investment of 1 dollar, with transaction fees capped as a portion of the premium. For native traders of Hyperliquid, this is also the cheapest route to speculate on stock-like perpetual market trends without paying capital rates.

When the platform launched the "Daily 1000 USD HYPE" reward campaign, the nominal trading volume skyrocketed more than 50-fold, yet the premiums and open interest remained virtually unchanged. On this platform, a 1 dollar premium can leverage approximately 1000 dollars of contract face value, while Derive's comparable figure is around 50 dollars of face value.

Rysk

Rysk leans more towards yield products rather than a trading market. You deposit HYPE, BTC, or ETH, choose a strike price above the spot price, and sell covered call options to whitelisted market makers. The premium is immediately credited in dollars; upon expiration, you can keep the tokens or settle them at the strike price. The cash-collateralized put option logic is the opposite.

Since migrating to HyperEVM in 2025, it has become the preferred tool for HYPE holders to earn yields. A Nasdaq-listed HYPE treasury company is also operating a treasury on Rysk.

The platform does not have an order book, Greek letters, or a clearing mechanism, requiring only one decision per month. You can only act as a seller and cannot buy back options before expiration to close positions; after May 2026, trading volume stagnated due to limitations on HYPE risk exposure that market makers were willing to assume. Fully collateralized does not equate to risk-free: if HYPE drops 40% in a month, you still hold HYPE, and the premium can only cover a small part of the loss.

Aevo

Aevo's architecture is similar to Derive's: it has its own L2, off-chain order book, and portfolio margining. It was once the largest on-chain options platform by scale in 2024.

From 2025 to 2026, the platform shifted its focus to launching pre-token futures, tokenized stocks, 1000x high-leverage “Degen” contracts, and PERPS+ (perpetual contracts with built-in options-style stop-losses). Listed options are limited to BTC, ETH, HYPE, and SOL. While the entire sector has grown fourfold, Aevo’s options business has shrunk by over 90%.

You can experience PERPS+: a one-click trading enhancement tool that can attach options strategies to your perpetual positions. PERPS+ allows you to protect, profit, or lock in your perpetual position trades without manually operating the options market, selecting strike prices, and managing various options combinations—all with a single operation.

Dream

Dream is a mobile app, not a protocol. You can top up using Apple Pay, choose assets like BTC, ETH, SOL, HYPE, PUMP, LIT, etc., select price direction and trade size, and the app will automatically buy call or put options for you.

• Buying a call option: betting on price increases
• Buying a put option: betting on price declines
• Prepay the premium, which is the cost of the option. Each contract comes with a strike price and expiration date. Full purchase of options means your maximum loss is the premium plus transaction fees.

For example, you could spend 100 dollars to buy a BTC call option. If BTC rises sufficiently before expiration, the option's value increases; if the market does not move as expected, the option expires worthless, resulting in a loss of that 100 dollars.

Dream is launching a Genesis points program, having issued 600,000 Genesis points; starting October 16th, it will automatically distribute weekly points and referral rewards every Friday.

Unresolved Issues with On-Chain Options

This sector already has layers for institutional bulk settlement and retail yield vaults, but there is a significant gap in the trading layer aimed at retail investors.

• Pricing: The trading costs for equivalent exposures on leading platforms are higher than Deribit. Unless the price differentials on on-chain order books (not just for bulk orders) narrow, there is no reason for retail investors to migrate.
• Concentrated risks with market makers: In publicly available information, Derive can only identify FalconX as a market maker; Paradex only mentions the Paradigm network; Rysk and Hypercall do not publicly disclose their market makers. The exit of any one market maker poses a significant hidden risk to the sector.
• Withdrawal restrictions for vault users: Rysk and Hypersurface users cannot close their positions before expiration. A covered call option that cannot be bought back early offers a weaker product experience compared to Deribit.
• Oracle and operational risks: Paradex experienced a chain rollback in January; the old vault of Aevo was hacked due to an oracle upgrade; Hypersurface can decide to exercise options early; Derive V3’s multi-signature accounts can bypass time locks. Currently, these platforms have not minimized trust requirements.

Simple Trading Strategies for Options Beginners

Buy a Call Option, Replacing Leverage for Going Long

The price of HYPE is about 87 dollars. You believe it will rise but are concerned about an interim pullback. You buy a call option with a strike price of 90 dollars, paying a premium of 4 dollars per HYPE. The break-even point is 94 dollars. If HYPE's price at expiration is 100 dollars, subtracting the premium, you profit 6 dollars per option; if the price is 90 or below, you lose the full premium of 4 dollars.

The key consideration is the time factor. A one-time premium payment for a call option will not trigger liquidation during a short-term pullback, but the market must rise as expected before expiration; otherwise, the premium will be entirely lost.

Buy a Put Option, Purchasing Insurance for Your Spot Holdings

The price of ETH is about 2560 dollars. You own 10 ETH and want to guard against a significant drop. You buy a put option with a strike price of 2300 dollars to cover your entire holding, paying a premium of 50 dollars per ETH, totaling 500 dollars.

If ETH drops to 2000 dollars at expiration, this put option pays out 3000 dollars. Including the premium, your total loss is 3100 dollars; without hedging, your loss would reach 5600 dollars.

The cost is the premium you need to pay, and there is an expiration time. If ETH is above 2300 dollars at expiration, the option expires worthless.

Sell Covered Call Options at a Price You’re Willing to Sell

You hold HYPE at a cost of about 87 dollars, willing to sell at 100 dollars. You deposit HYPE in Rysk and sell a call option with a strike price of 100 dollars, receiving the premium upfront (example: 2 dollars per HYPE).

At expiration, if HYPE is below 100 dollars, you keep both the tokens and the premium. If HYPE rises to 120 dollars at expiration, your HYPE will be settled at 100 dollars, while the premium remains yours.

The trade-off is that you forfeit all increases above 100 dollars, while you bear the full risk of asset declines. The margin will be locked until settlement is complete.

Sell Cash-Secured Put Options at a Price You Want to Buy In

BTC is about 84000 dollars, and you are willing to buy at 80000 dollars. You sell a put option covering 1 BTC, locking up 80000 dollars in stablecoins as collateral, collecting an example premium of 2000 dollars.

If BTC is above 80000 dollars at expiration, you reclaim your stablecoins and keep the premium. If BTC is below 80000 dollars at expiration, you will buy BTC at 80000 dollars, with the premium lowering your effective cost to 78000 dollars.

However, if BTC drops to 60000 dollars, you still need to buy at 80000 dollars. Funds are locked until settlement.

Conclusion

On-chain options are currently the largest pillar in the crypto derivatives space.

The vast majority of crypto options trading still occurs on centralized platforms. The nominal trading volume of on-chain options has just hit a two-year high, but the 5.49 billion dollars in trading volume over the past 30 days is only 6.9% of Deribit's 79.8 billion dollars. Just Deribit alone accounts for 14.5 times the total size of all on-chain platforms combined.

This huge gap also represents a tremendous opportunity; the next major challenge for this sector is to attract a steady and consistent flow of retail trading.