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

Blockchain

Altcoins

API3 aims to solve the blockchain oracle problem by using decentralized APIs (dAPIs) for DApps via Airnode, a decentralized network of first-party oracles.

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An API (application programming interface) is an essential tool for communication between different software applications. It serves diverse purposes, including automating tasks, managing web content, receiving data from external sources and much more. 

 need APIs to help source data from the real world, but 

 (DApps), don’t have direct access to APIs, as they only operate using on-chain data.

This data disconnect has prompted the creation of bridges known as 

 that connect smart contracts with APIs to acquire external data. However, many existing oracles are centralized, which makes them vulnerable to compromise. This can affect smart contracts on blockchains as well. The challenge of ensuring the reliability and security of oracles is popularly referred to as the oracle problem.

API3 solves the oracle problem by introducing Airnode, a web3 API gateway that directly connects Web APIs to decentralized applications, thus creating decentralized APIs (dAPIs). To see what this means for the future of 

 is a collaborative project launched in December 2020 to create decentralized APIs (dAPIs) for DApps via Airnode, a decentralized network of first-party oracles

Simply put, dAPIs deliver traditional API services through a design that directly interacts with and provides off-chain data, such as price feeds. APIs are an established standard in the development of centralized software and applications.

API3’s mission is to usher in an era of dAPIs as the standard for decentralized applications via its Airnode technology.

API3 views the oracle problem as a misinterpretation of the real problem, which has resulted in the development of ill-suited oracles today. Third-party oracles such as 

 pose several problems. First, they may not be transparent about their data sources, meaning that the data they provide may be inconsistent or unreliable. Additionally, they’re expensive for data consumers and prone to exploits and high 

According to API3, if API providers have the data and services that blockchains require but the only problem is obtaining it, then it’s actually an API connectivity problem. This redefinition allows API3 to usher in the third generation of blockchain applications by bringing APIs 

The project is fully decentralized and secured, and is governed by the API3 DAO and powered by API3 token. API3 is also a multilayered, cross-chain serverless protocol. It’s currently connected to over 120 data feeds and deployed across 11 blockchains, including 

Decentralized APIs (dAPIs) are API services governed by the API3 DAO. Designed to be compatible with smart contracts, they relay data feeds to DApps, whose owners can then pay in a crypto token of their choosing for the API service in a transparent transactional process through the API3 Market. API providers run their own oracles through an automated first-party oracle node called the Airnode, allowing them to earn revenue directly from the API3 DAO.

Since DApps source data from primary Web API providers, the risk of data tampering and the need for rent-seeking middlemen are eliminated. These are issues that currently affect third-party oracle projects such as Chainlink.

API3 also covers DApps against any losses that could occur in case of dAPI malfunctions. This insurance policy makes the dAPI a secure and attractive solution to DApp developers.

Furthermore, API3’s data feeds are OEV extraction–enabled. 

 (OEV)–based updates allow for precise, on-demand data feed updates, resulting in cost-effective and accurate data feeds. Additionally, this feature enables API3 to take OEV and return it to the DApps, providing them with a valuable source of income.

First-party oracles are a core feature of the API3 project, whose dAPIs use first-party oracle nodes operated by Web API data providers.

With first-party oracles, the API providers sign their responses on-chain, providing the best proof that the data hasn’t been tampered with. Some of the characteristics of first-party oracle data feeds include:

Airnode is a serverless first-party oracle node specifically crafted for API providers to run their own oracles. API3 intends to optimize the process of enabling API providers to avail dAPIs to DApps via Airnode by making it fully automated, with no need for maintenance. No knowledge of blockchain is needed to run Airnode, thereby lowering the barriers to entry for API providers more familiar with the established Web 2.0 environment.

API providers can initially use Airnode at no cost, with charges incurred only after they start generating revenue from their services. Additionally, providers can choose to accept payment in cryptocurrency or fiat, demonstrating the platform's flexibility and potentially attracting more traditional API providers to offer their services.

 is a decentralized network of third-party oracles that combine data off-chain to reduce on-chain transaction costs. Only the final single-value data feed is published on-chain for smart contracts. This model is viable when data needs to be aggregated to capture things like commodity prices or weather reports.

However, as a third-party oracle network, Chainlink acts as the middleman between blockchains and APIs, in opposition to the fundamental ethos of blockchain technology. A middleman incurs higher costs and also makes a blockchain more vulnerable to attacks. In contrast, first-party oracle networks like API3 help reduce costs, redundancy and security risks.

Chainlink and other third-party oracles practice data source obfuscation, which discourages accountability from data providers and keeps them off-chain. With API3, there’s transparency regarding the origin of the data source. The project also enables and incentivizes data providers to bring their businesses on-chain, increasing the trust between web3 applications and API providers.

With API3’s model, API providers stand to benefit because API3 positions them as the project’s engine. They’re incentivized with a data marketplace, direct compensation and an automated system. This allows them to fully reap the benefits of delivering a much-needed service to blockchain applications. As a result, API3 is poised to establish itself as a robust, secure and cost-efficient solution for DApps.

API3’s native token (also known as API3) enables the project to create, manage and monetize its dAPIs at scale. The project’s platform is governed by a 

 (DAO) that oversees the collaborative effort of token holders to secure, govern and benefit from its value capture mechanisms via the API3 token.

Holders of the API3 token gain the right to participate in API3 DAO governance through 

. API3 has implemented an insurance pool in which holders stake their API3 tokens to acquire governing rights in the DAO and receive weekly inflationary staking rewards. The API3 token has three main utilities:

As of Sep 15, 2023, the API3 token price is $1.04, which is 22.99% higher than its all-time-low of $0.85 on Aug 5, 2023, and 89.84% lower than its all-time-high of $10.30 on Apr 7, 2021.

Despite a declining trend over the past year, price prediction experts remain bullish on API3. PricePrediction 

 of API3 reaching $2.86 in 2025, followed by a mega upswing to a maximum of $18.42 by 2030. Meanwhile, DigitalCoinPrice 

 and estimates API3 will hit a maximum price of $3.91 in 2025, followed by a slower gain that could potentially reach $11.30 in 2030.

Note that optimistic forecasts don’t guarantee identical outcomes for the future. Remember to 

, including when it comes to cryptocurrencies.

API3 is going on its third year with the promise of unlocking the next level of value in the web3 economy. However, Chainlink still holds the number one spot as a multibillion-dollar oracle project, with the majority of the 

Regardless, API3’s market data shows interest from users. With a market cap of over $100 million, a substantial trading volume and over 75% of its total supply already in circulation, the future looks promising for API3.

Furthermore, API3 OEV extraction is a valuable design feature that delivers a crucial security feature to DApp developers. This attribute is absent from most peer-to-peer oracle networks, including Chainlink.

, with the Bybit exchange, which has a user-friendly and intuitive interface for secure and fast trading.

API3 presents a solution that rethinks the oracle problem and seeks to change the way DApps access real-world data feeds. If Web APIs can be designed into a smart contract–compatible format, thus directly connecting API providers and DApps, third-party oracle networks like Chainlink could cease to be the industry standard for oracle solutions.

API3 introduces the first-party oracle concept, which involves creating, managing and monetizing decentralized APIs (dAPIs) at scale for the benefit of the web3 economy. Thus, APIs can be available for DApps as on-chain data feeds securely in real time and on demand.

By cutting off third-party middlemen and adding another channel of monetization, dAPIs could indeed hold the key to expediting the realization of an expansive web3 ecosystem through blockchain technology.

What Is API3: Decentralizing APIs To Democratize Real-World Data

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards