On the eve of the outbreak of on chain options Article: Delphi Digital Compilation: AididiaoJP, Foresight News The size of the cryptocurrency options market far exceeds most people's perception. The trading volume of cryptocurrency derivatives on the Chicago Mercantile Exchange (CME) is 46% higher than the historical record set last year. Institutional investors need clear risk management tools to hedge large positions, and options are the only cryptocurrency tool that can provide this functionality. By mid-2025, the total amount of open Bitcoin options contracts reached $65 billion, surpassing open futures contracts for the first time. Futures are leveraged tools, while options allow funds to set a loss limit for their $500 million Bitcoin holdings by paying premiums. This turning point indicates that tools with risk definition capabilities are gradually replacing pure leverage tools. This growth is mainly concentrated on two platforms. Deribit has been a mainstream platform for cryptocurrency options trading for many years, and received institutional level endorsement after being acquired by Coinbase for $2.9 billion in 2025. After the launch of IBIT options at the end of 2024, traditional financial capital will be introduced into this field. The options market is rapidly expanding, but the vast majority of transactions still need to be completed through intermediaries. On chain options are still in their infancy, and the market share of decentralized derivatives has risen from 2% to over 10% within two years. Hyperliquid has proven that decentralized exchanges (DEX) can rival centralized exchanges in terms of speed and transparency. However, there has not yet been a representative project of similar level for on chain options. @DeriveXYZ is still a leading on chain option agreement, with nominal option trading volume exceeding $700 million in the past 30 days. This agreement was launched in August 2021 under the name of Lyra as an Automated Market Maker (AMM) for options. After experiencing a bear market, it was fully restructured in 2023 and is now based on its own OP Stack Layer 2 to build a fuel free central limit order book. This refactoring has completely changed the pricing mechanism. Market makers quote directly on the order book, narrowing spreads, providing more accurate pricing, and supporting larger scale trading. Traders can enjoy zero fuel costs and sub second execution speed. Its investment portfolio margin system has also received attention from institutions. The system evaluates overall position risk through scenario analysis. For example, if a trader holds both long and short call options on the same underlying asset, the system will not charge separate margin for each leg. The collateral required for hedging positions is lower than the simple sum of each position, which is the common logic of traditional financial derivatives trading platforms. Derive also provides perpetual contracts and lending services on the same Layer 2, and supports cross product cross margin. @KyanExchange is moving in the same direction in different ways. This platform combines an order book matching engine with on chain investment portfolio margin, supporting multi leg operations in a single atomic transaction. Traders can deploy the Iron Bald Eagle strategy with just a few clicks. The clearing mechanism adopted by Kyan is also different from most DeFi protocols. When the margin threshold is exceeded, the platform will not liquidate the entire account, but will execute partial liquidation, only closing the minimum position sufficient to restore the margin requirement of the account. Kyan is currently in the Arbitrum testing phase and the main network is about to go live. Who needs options? Asset management companies building structured products urgently need a clearly defined risk return structure provided by options. Taking JPMorgan's stock premium return ETF as an example, this fund is built on a covered open position strategy and is one of the largest actively managed funds in the world. The overall management scale of income products based on derivatives has exceeded 100 billion US dollars. As more institutional funds enter the chain, the corresponding hedging needs will also migrate accordingly. Currently, an increasing number of institutional investors hold or plan to allocate digital assets in the short term. The open interest contracts of IBIT options have surpassed the gold ETF GLD. In 2025, CME processed nominal trading volumes of cryptocurrency derivatives worth $3 trillion. The timing is ripe, and in the early stages, most on chain option agreements failed to survive due to regulatory uncertainty. For example, Opyn was penalized by the CFTC for operating an unlicensed derivatives exchange. At that time, the team was unable to predict whether the product would be deemed illegal in the next quarter while developing it. The current situation is improving. In September 2025, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly issued a statement allowing regulated exchanges to conduct spot cryptocurrency trading. The CLARITY Act has been passed in the House of Representatives, proposing to bring the digital commodity spot market under the supervision of the CFTC. The Senate version is still under negotiation and is currently on hold. CME Group will launch 24/7 cryptocurrency options trading on May 29th. Although this does not guarantee that on chain protocols will necessarily win, the overall environment has undergone substantial changes.