On-chain perpetual trading protocols have achieved a staggering growth through 2022
Could be 2023 the year to shine for option protocols?
At @Castle__Cap we have taken a look at data and have summarized it in 10 tweets ✍️
h/t @tokenterminal
Could be 2023 the year to shine for option protocols?
At @Castle__Cap we have taken a look at data and have summarized it in 10 tweets ✍️
h/t @tokenterminal
1. On-chain options were implemented at the end of 2020 being @opyn_ & @HegicOptions first movers
Volumes were not high through 2021 though, as we can appreciate in the following chart featuring Opyn trading volume
$18.2M were traded in Opyn 2021
Kudos to @aerhy for the dash
Volumes were not high through 2021 though, as we can appreciate in the following chart featuring Opyn trading volume
$18.2M were traded in Opyn 2021
Kudos to @aerhy for the dash
2. Competition emerged through 2022 and the options landscape changed drastically
Volumes exploded in 2022 (vs 2021) becoming @lyrafinance the market leader with their new model
From Apr-Dec 22 $368M were traded in Lyra
20 times more volume than Opyn through 2021
h/t @ahkek4
Volumes exploded in 2022 (vs 2021) becoming @lyrafinance the market leader with their new model
From Apr-Dec 22 $368M were traded in Lyra
20 times more volume than Opyn through 2021
h/t @ahkek4
3. Even though 2022 was a good year for on-chain options, there is still plenty of potential
Just to serve as comparison, volumes at on-chain opt venues are less than 2% of GMX
Last 180d vol:
GMX: $48600M
LYRA: $520.6M
HEGIC: $110.2M
PREMIA: $96.3M
DOPEX: $30.0M
OPYN: $26.2M
Just to serve as comparison, volumes at on-chain opt venues are less than 2% of GMX
Last 180d vol:
GMX: $48600M
LYRA: $520.6M
HEGIC: $110.2M
PREMIA: $96.3M
DOPEX: $30.0M
OPYN: $26.2M
4. Options are more complex and we probably should not expect them to reach perp volumes anytime soon
Specially considering what is the typical user of on-chain venues
But it is reasonable to expect them being at least 10% of perp business
Deribit shows there is enough demand
Specially considering what is the typical user of on-chain venues
But it is reasonable to expect them being at least 10% of perp business
Deribit shows there is enough demand
5. Their OI is almost 1000x bigger than LYRA
Deribit OI: $15000M
Lyra OI: $24M
Would be reasonable to expect dexes gaining slowly some market share vs Deribit
A similar movement happened with swaps & perps
FTX turmoil has speed up the process
Bullish on non-custodial apps
Deribit OI: $15000M
Lyra OI: $24M
Would be reasonable to expect dexes gaining slowly some market share vs Deribit
A similar movement happened with swaps & perps
FTX turmoil has speed up the process
Bullish on non-custodial apps
6. With respect to premiums collected by the protocols, not surprisingly the same players remain in the podium
Otherwise it would mean that some venues are far cheaper than others, which should not happen on a long (180 days) timeframe
LYRA: $18.1M
HEGIC: $3.3M
PREMIA: $2.3M
Otherwise it would mean that some venues are far cheaper than others, which should not happen on a long (180 days) timeframe
LYRA: $18.1M
HEGIC: $3.3M
PREMIA: $2.3M
7. Moreover, the premiums/volume ratio can be calculated to find out how pricing differs on these platforms
LYRA: 3.5%
HEGIC: 3.0%
PREMIA: 2.4%
This would indicate than on average, PREMIA options are cheaper than competitors
LYRA: 3.5%
HEGIC: 3.0%
PREMIA: 2.4%
This would indicate than on average, PREMIA options are cheaper than competitors
8. Checking the daily active users becomes apparent on-chain options remain a small niche within DeFi
Daily active users 11th April
UNI: 59.8k
LYRA: 147
HEGIC: 68
PREMIA: 54
Still a long way to go, no reason on-chain options cannot reach 1-2k users on daily basis this cycle
Daily active users 11th April
UNI: 59.8k
LYRA: 147
HEGIC: 68
PREMIA: 54
Still a long way to go, no reason on-chain options cannot reach 1-2k users on daily basis this cycle
9. Once enough demand is built, more supply will need to be made available to traders
Would expect options platforms TVL to grow alongside volumes to allow bigger open interests and thus more fees
At the moment remains one order of magnitude smaller than the big perp venues
Would expect options platforms TVL to grow alongside volumes to allow bigger open interests and thus more fees
At the moment remains one order of magnitude smaller than the big perp venues
10. Summary
- Option volumes grew 20x through 2022, but still just 1% of perp volumes
- Option on-chain OI less than 0.5% of Deribit OI
- LYRA, HEGIC & PREMIA are the strongest players atm
- Less than 300 daily users vs almost 60k UNI
- Options TVL still below $50M in total
- Option volumes grew 20x through 2022, but still just 1% of perp volumes
- Option on-chain OI less than 0.5% of Deribit OI
- LYRA, HEGIC & PREMIA are the strongest players atm
- Less than 300 daily users vs almost 60k UNI
- Options TVL still below $50M in total
Hope you enjoyed it & find it useful
Follow @Castle__Cap if you want another source of good and free crypto info
Bullish on options, bullish on DeFi
May the luck be with us in this battle 🫡
Follow @Castle__Cap if you want another source of good and free crypto info
Bullish on options, bullish on DeFi
May the luck be with us in this battle 🫡
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