Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

December's end-of-year options expiration brought an unexpected drop as realized volatility fell to the lowest levels of the month. Perpetual swap open interest remained stable, indicating these markets weren't heavily used for hedging against expired options, likely contributing to the muted volatility. 

While most expired open interest in Bitcoin (BTC) and Ethereum (ETH) hasn't been reinvested, the balance of calls and puts remains consistent. Notably, ETH options are pricing in higher implied volatility as compared to BTC, particularly for shorter expirations, leading to a flat term structure for ETH, while BTC is offering cheaper options exposure.

In the perpetual markets, low volatility and minimal spot movements have led funding rates for nearly all tokens to mirror broader market sentiment throughout the holiday season. On the options side, BTC's term structure is noticeably lower and steeper than ETH's, with realized volatility now dipping below implied volatility levels, highlighting an intriguing shift in market dynamics.

Please check out the report’s highlights.

Open Interest Solid Amid Year-End Options Expiration

Although open interest for both BTC and ETH perpetual swaps hasn’t returned to early December 2024 highs, it remained robust throughout the significant end-of-year options expiration event. This suggests that these markets weren’t heavily utilized to 

 of the expiring options contracts, likely contributing to the lack of volatility observed during this period. Instead, trading volumes have dipped noticeably during the winter holiday season, coinciding with a collapse in realized volatility back to December 2024’s lowest levels.

BTC Option Curve Remains Steep During Call-Put Parity

The expiration of December's end-of-year options didn’t trigger the anticipated surge in volatility; instead, realized volatility has plummeted to the lower end of its recent range. The implied volatility term structure remains steep compared to both its recent behavior and ETH's, with longer-dated implied volatility around 57%, and 1-week at-the-money options trading about five points lower. Much of the expired open interest hasn’t yet been rolled into new positions, maintaining a neutral balance between puts and calls. Consequently, BTC's options market positioning is relatively neutral, lacking the leverage it had at the start of December 2024.

Huge ETH Option Expiring Doesn’t Cause Volatility

A late December spike in realized volatility didn’t carry into the new year, with ETH’s spot price currently exhibiting volatility below that of short-tenor implied volatility. Interestingly, the implied volatility term structure has undergone a steepening and re-flattening over the past week, contrasting with BTC’s slightly steeper profile. This suggests that ETH’s options market is anticipating higher short-term volatility in spot price movements. 

Despite the significant expiration of options open interest at the end of December 2024, which didn’t lead to a rollover into later expirations, call options continue to dominate the market and have increased at the start of 2025.

Advanced

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan 2, 2025): BTC Options Continue to See Call-Put Parity, With Lower Short-Term Volatility Expected

Dive into FLock, a decentralized platform that revolutionizes the way AI models are developed, trained and deployed.

Artificial intelligence (AI) is poised to transform countless industries, but its development often raises questions about privacy, control and inclusivity. 

 is a unique decentralized platform that democratizes AI training, fine-tuning and inferencing. With its blockchain-powered infrastructure, FLock ensures transparency, security and community-driven decision-making, paving the way for AI models that align with established societal values. 

In this article, we’ll explore how FLock decentralizes AI training, its key features and its potential impact on developers, communities and users.

 platform that revolutionizes the way AI models are developed, trained and deployed. By leveraging blockchain technology and a novel approach called 

, FLock addresses critical issues in AI development, such as centralized control, lack of transparency and privacy concerns.

At its core, FLock’s mission is to democratize AI by enabling communities to participate directly in the creation and refinement of AI models. Through federated learning, FLock trains AI models across multiple decentralized devices or servers. This method ensures that data remains local, eliminating the need for raw data exchange while still enabling robust model training. By decentralizing the training process, FLock not only protects individual privacy, but also fosters a more inclusive ecosystem in which diverse contributors can collaborate.

What sets FLock apart is its integration of 

. This ensures that all contributions — whether data, compute power or feedback — are transparently recorded and fairly rewarded. Blockchain tech’s immutable ledger enhances trust among participants and safeguards the process against manipulation. Additionally, the platform’s on-chain incentive mechanisms encourage participation from a wide range of contributors, ensuring that rewards are distributed equitably.

Ultimately, FLock empowers communities to develop bespoke AI models tailored to their specific needs. By decentralizing the process and prioritizing transparency and collaboration, FLock breaks the monopoly of large corporations, creating an AI ecosystem that aligns with public ethics and societal values.

, an Oxford alumnus with a robust background in AI and blockchain technology. Sun, who serves as FLock's CEO, has an impressive career trajectory, having worked as the Director of AI for the Royal Bank of Canada and as an AI Research Fellow at Imperial College London. His vision for FLock stems from a deep understanding of both the technical and ethical challenges of AI development.

The founding team also includes other Oxford alumni, boasting over a decade of combined experience in AI research and the cryptocurrency industry. This team brings a collective blend of academic excellence and practical expertise that positions FLock to lead the decentralized AI movement.

FLock has successfully raised $11 million in funding across two rounds, reflecting strong investor confidence in its vision. In May 2024, FLock secured a $6 million seed round co-led by Lightspeed Faction and Tagus Capital, with additional backing from Digital Currency Group (DCG), Volt Capital, OKX Ventures and Inception Capital.

Later, in December 2024, FLock announced a $3 million successful funding round led by DCG and joined by prominent names like Animoca Brands, Fenbushi Capital, GnosisVC and GSR. These investments are being channelled into enhancing the platform’s testnet and federated learning client, accelerating FLock’s mission of enabling secure, collaborative AI development.

With this funding and over 1,500 nodes contributing from platforms like Numerai and Kaggle, FLock is rapidly scaling its impact on decentralized AI training.

FLock AI revolutionizes AI development through its decentralized training framework. This approach allows participants to contribute to AI model training without ever sharing their personal data. Instead, models are trained locally across devices using federated learning, which ensures that data remains with its owners while still enhancing the accuracy of the model overall. 

FLock’s reward system is designed to incentivize active participation. Contributors who provide data, computational power and/or feedback are compensated with FLOCK tokens, ensuring a fair distribution of rewards. 

FLock empowers its community through a robust governance framework. Decisions regarding AI model development, deployment and ethical considerations are driven by the community, ensuring alignment with established societal values. Through blockchain-based voting mechanisms, contributors can influence the direction of AI projects, fostering transparency and public accountability. 

FLock’s modular architecture allows contributors to participate in specific aspects of AI model development. Whether providing raw data or computational power or even refining algorithms, the platform enables a collaborative and scalable development process. 

At the core of FLock’s philosophy is its commitment to privacy and security. By leveraging blockchain technology, the platform ensures that no single entity controls the AI development process. Data remains local and protected by cryptographic measures, while the immutability of blockchain guarantees transparency in every transaction and model update. 

 begins with a blockchain and an AI layer.

The blockchain layer underpins FLock’s incentivization and security mechanisms.

The AI layer facilitates model training, refinement and deployment, leveraging both centralized and federated approaches.

Let’s have a look at the supply and demand for the FLOCK token.

FLock adopts a 1:2 ratio model between team/investors (33.3%) and community (66.7%), prioritizing community-driven growth and ecosystem expansion. The majority of tokens are allocated to incentivize user participation and long-term ecosystem success.

FLock aims to improve the future of AI development by decentralizing the training process and ensuring transparency, privacy and inclusivity. By leveraging blockchain and federated learning, FLock empowers communities to contribute to AI creation without compromising on privacy. Its innovative reward system and community-driven governance foster a fair and collaborative ecosystem. 

With significant backing and a growing network of contributors, FLock is positioning itself as a leader in decentralized AI, offering a more ethical and secure alternative to traditional AI development models. As it continues to scale, FLock is set to transform the way AI models are built and deployed.

 — and earn a share of a 10 million FLOCK prize pool. For more details, visit 

Intermediate

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FLock AI: Decentralized AI Training

In this tutorial, we’ll explore how you can complete a series of tasks in Network3 for Bybit Web3 Airdrop Arcade.

Task 1: Register for a Network3 Account and Connect Your Bybit Wallet 

: Navigate to the campaign page and click on the 

task. Click on the task, and Galxe will ask to redirect you to the Network3 register page.

: Register for a Network3 account using your email address. You may indicate a 

Task 2: Download the Network3 App and Run a Node for One Hour

 and choose your operating system to download the Network3 app.

 or powerbutton, depending upon which operating system you’re using. For ease of reference, we’ve used macOS and iOS as examples below.

: Keep running the node until the timer reaches 

Beginner

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How to Complete Network3 Tasks for Bybit Web3 Airdrop Arcade

Bybit launched the Bybit Merch Creative Challenge for university students worldwide, offering a $50,000 USDT prize pool.

The S&P 500 dropped 0.22% on Thursday, its fifth straight decline, with investors eyeing Friday’s economic updates. Coindesk Indices, an index measuring broader cryptocurrency market performance was up by 2.03%, with Bitcoin and Ether rising by 2.79% and 2.70%, respectively in the past 24 hours.

Today's top performer is XRP, which surged 1.9% following a rise in price driven by increased open interest and positive market sentiment.

Ripple (XRP), launched in August 2012, is a blockchain technology company focused on improving international payments with its cryptocurrency, XRP. XRP price surged due to increased open interest, a major XRP transfer, and market sentiment linked to Trump's inauguration. Bullish momentum is supported by high short liquidations, with key resistance levels to watch for further price movement.

Check Out the Latest Prices, Charts, and Data of 

 for university students worldwide, offering a $50,000 USDT prize pool. Participants can design exclusive Bybit merchandise, with submissions open until Jan. 15, 2025. Winners will be announced on Feb. 1, 2025, across four prize categories.

Yesterday, Bitcoin Spot ETFs recorded a total inflow of $84.8M, driven by $107.9M from non-GBTC funds, partially offset by a $23.1M outflow from GBTC.

, offering an airdrop for participants who complete tasks like swapping and bridging using the Mango wallet. Points earned through tasks determine airdrop rewards. Join via the Mango wallet and follow steps on the testnet dashboard.

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Bybit Launches $50,000 Merch Design Challenge for University Students Worldwide

Bybit Learn

Bitcoin

The BRC-69 standard is a method for inscribing information onto satoshis. Learn more about how it works and how it differs from the BRC-20 standard here.

 have been one of the hottest topics in the cryptocurrency world. The Ordinals protocol allows people to create Bitcoin NFTs with ease. However, it's also led to 

 and other issues with excessive network traffic. 

The BRC-69 token standard claims to solve the problem. This new Bitcoin Ordinals protocol could potentially revolutionize Bitcoin NFTs. Interested in seeing how BRC-69 works and whether it lives up to the hype? Keep reading to learn all about this new protocol.

BRC-69's main goal is to inscribe data onto satoshis. These small particles of Bitcoin can hold images, text and other forms of media. However, finding enough space to store all this data can be tricky. BRC-69 solves that problem by using recursive inscriptions. Instead of inscribing all the data directly onto the blockchain, BRC-69 only inscribes a single line that can then programmatically 

 a full ordinal. Through recursive inscriptions, existing on-chain data can create new ordinals.

. It begins by inscribing the basic traits of the ordinal onto the token. The creator of the ordinal then deploys a reference source that fully describes all attributes of the ordinals collections. Next, a compiler operation is used to make a Javascript program that can render the assets. Finally, the mint operation uses HTML inscriptions to generate the entire ordinal.

How Does the BRC-69 Standard Affect the Bitcoin Blockchain?

 to save space, so Bitcoin Ordinals don't need to individually store massive amounts of similar data. Instead, all the data for an ordinal collection is only stored once, and each ordinal can reference it as needed. This cuts back on repeated data. When an ordinal is transferred, the Bitcoin network only has to process the single reference line instead of a bunch of digital assets.

Furthermore, BRC-69 simplifies the image rendering process on an ordinals explorer by automating it, thus removing unnecessary steps. This automation enables the initiation of pre-reveal collections and on-chain unveilings, which introduces an additional, thrilling element for both creators and users. The images can be displayed by any front end that has implemented recursive inscription, using the on-chain deploy inscription, thereby streamlining the entire procedure.

All of these changes to how ordinals are handled have resulted in additional blockchain activity. After Bitcoin Ordinals were launched, the number of transactions per day

. However, as people realized that ordinals consumed massive amounts of space and charged high storage fees, interest dropped off and transactions slowed to around 350,000 per day. Since the release of BRC-69, however, the average number of daily transactions has spiked yet again. Throughout July, the number of transactions per day has repeatedly reached almost 600,000. Ultimately, BRC-69 has managed to reinvigorate the Bitcoin blockchain and draw more attention to Bitcoin Ordinals.

Advantages and Disadvantages of the BRC-69 Standard

There are several benefits to working with the BRC-69 standard, but it also comes with some potential downsides.

Since BRC-69 recycles data, it ends up saving quite a bit of digital space. Ordinals made with BRC-69 are significantly smaller, which results in big cost savings for users. Since Bitcoin network fees are proportional to the byte size of the transaction, smaller ordinals mean lower fees. Users can buy, sell and trade Bitcoin NFTs without having to pay prohibitive fees.

The ability to save space with the BRC-69 Bitcoin standard also allows for more complex ordinals. Previously, ordinals had a limit of 4 megabytes because Bitcoin block spaces could only hold so much information. With BRC-69, the resultant ordinal can be much larger. The ordinal only holds a single line of text, but that line can load quite a bit of information. This allows for more detailed images, longer text and more complex videos.

In addition to providing space and storage savings, BRC-69 also has some unique features that could change how ordinals work. This token standard allows creators to

. When creating recursive inscriptions collections, people can choose exactly when and how the line of instructive text displays the full media of the ordinal.

Creators can design ordinal collections that are unveiled as part of a large event. They can also set up their ordinals to fully render once users fulfill other conditions. This helps to make 

While BRC-69 does save space and make it a little more affordable to process a Bitcoin transaction, it doesn't entirely solve the problem of congestion. When there are a lot of transactions on the chain, it can be hard for Bitcoin miners to validate transactions. Users can still end up paying extra to get their transactions validated, or waiting excessive amounts of time to finalize transactions.

Ultimately, if BRC-69 really takes off, it may end up causing some of the same problems as previous versions of ordinals. Any Bitcoin trend eventually reaches a certain level of popularity, after which 

 space is simply too scarce to handle the vast wave of transactions. Though it hasn't happened yet in this case, there’s always the possibility that BRC-69 could still cause congestion problems and overwhelm Bitcoin block spaces.

Both BRC-69 and BRC-20 are Bitcoin token standards, so they work in similar ways and have similar outcomes. These protocols allow users to inscribe data onto satoshis, which essentially creates an NFT attached directly to the Bitcoin blockchain. People can send and receive Bitcoin Ordinals just as with any other Bitcoin token, but at the same time, they can also look at unique types of images or other digital assets.

Despite having the same basic goal, BRC-69 and BRC-20 achieve it in two separate ways. With the BRC-20 Bitcoin standard, users embed JSON data into the metadata for the satoshi. This inscription must include all details of how the resulting ordinal will look and function. With BRC-69, however, users store all the details of the NFT elsewhere and only inscribe the satoshi with the retrieval information.

Ultimately, this change results in a far more efficient type of ordinal. BRC-69 ordinals

 over BRC-20 ordinals. If you use the BRC-69 method, your NFTs are smaller in size, yet they can contain more information. In addition, unlike BRC-20 tokens that render instantly, BRC-69 also lets you select a specific rendering time.

Is the BRC-69 standard likely to become the preferred method for handling Bitcoin Ordinals? So far, it seems to be doing quite well. Since the introduction of this new standard, the Bitcoin network has been very busy handling NFTs. Users love that it saves space and allows them to trade NFTs without spending as much money on fees. If you like trading NFTs as an investment, expect to see more BRC-69 tokens in the future.

BRC-69 is still a relatively new token standard, but it's already making waves in the crypto community. Since recursive inscriptions can render ordinals without using much block space, BRC-69 lets people create NFTs more efficiently. This exciting development has the potential to make Bitcoin NFTs even more popular than they already are.

What Is the BRC-69 Standard & How Does It Differ From BRC-20?

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards