Crypto is Ready for Onchain Options | Nick Forster, CEO of Derive

The crypto derivatives market has long been dominated by perpetual futures, a blunt but simple instrument that bootstrapped liquidity quickly. Options, by contrast, remain a small fraction of crypto trading volume—roughly 3-4% of the perp market, compared to traditional finance where options are roughly equal to or slightly larger than futures. Nick Forster, CEO of Derive, argues this gap is closing, and the October 10, 2024 market event was the catalyst.

Why Options Lagged Behind Perps

Options are structurally harder to launch than perpetuals. A perp market needs only two participant types—those going long or short and those providing liquidity. Options require a richer ecosystem: sellers, buyers, hedgers, and yield seekers all need to coexist to create a "double coincidence of wants." This takes time to assemble. Forster notes that options are always the last financial vertical to mature in any new asset class, because they need anchor participants—institutional players earning yield on large holdings or corporations hedging real-world costs—to create a competitive two-way market.