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

block-scholes-x-bybit-report.jpeg

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

flock.png

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

network3 tutorial.png

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.

2.png

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

Bybit Learn

Blockchain

ARPA Network is a decentralized Layer 2 blockchain protocol that adds privacy to Ethereum transactions. Learn more about how it works in this article.

 for developers. However, Ethereum does have some downsides, such as its lack of privacy. ARPA Network hopes to solve this problem by adding privacy-preserving 

 to the Ethereum ecosystem. What does this mean for users, and how will it affect the blockchain? Here's what you need to know about the new ARPA Network.

ARPA Network’s recent origin dates back to a white paper released in late 2022 by

. This Singaporean development duo was already well-known in blockchain spaces for developing 

, a blockchain asset management platform, and they released the ARPA chain in 2019 as a way to provide general purpose multiparty computation.

While working with blockchain systems, Penrose Tech noticed there was an increasing need for data privacy on the Ethereum blockchain. Penrose Tech decided to take the theory of their ARPA chain and apply it to Ethereum.

After a few months of development, the ARPA Network testnet was released in the spring of 2023. The system worked well for testers and was launched on the Ethereum mainnet on Jun 21, 2023. Since then, it’s attracted many users and has been involved in countless transactions.

ARPA's main focus is data privacy. Ethereum does a lot of things well, but it's not necessarily designed to protect users' confidentiality. As an open-source public blockchain, it's very easy for people to track things like how much money a user is receiving or what types of transactions they’re involved in. ARPA is designed to obscure the identities involved in transactions.

There have been a few other attempts at creating a privacy-preserving computation network based on the Ethereum system. However, ARPA's creators aim to provide privacy without compromising on things like highly scalable infrastructure. Their innovative solution prioritizes decentralization, flexibility and security. Users can customize signature policies, process their signatures through multiple nodes and verify signatures cryptographically. Unlike some other platforms, ARPA Network lets people maintain secure and separate data utility without having to turn over a lot of their personal information to a third-party system.

 (MPC) is a cryptographic computational sharding process that lets multiple parties manage a computation without being able to see each other's data synergies. When users create transactions, MPC simultaneously processes proxy smart contracts from multiple entities without sharing which information is connected with each signature. 

The other key mechanic used by ARPA Network is 

, a cryptographic method for verifying authentic signatures. BLS signatures can confirm that a signature is accurate, with a separate data utility that allows for convenient random number generation.

. Its protocol layer builds a foundation for the entire network to run on. This decentralized, 

 that provide computational power, data utility and security. The second layer is a computational layer that can collaboratively analyze data and perform the SMPC process. 

Accurate nodes receive ARPA tokens as a reward for loaning their computational power, while malicious nodes are penalized and forfeit their security deposit. This ensures transactions are processed in a secure and timely manner.

Due to its unique design, ARPA provides features beyond its privacy-preserving computation network. Even those who don't need confidential proxy smart contracts can benefit from working with ARPA Network. As advertised, its other beneficial features include the following.

Anyone with the right hardware can choose to become an ARPA Network node and collaboratively analyze data. To do so, stake a minimum of 500,000 ARPA tokens as a security deposit and then agree to perform BLS tasks. In return, you earn rewards in 

 by locking ARPA tokens for a minimum of 14 days. The maximum staking limit is 2.5 million ARPA coins at a time. Depending upon how long you stake your coins, you can earn an impressive amount of rewards.

ARPA Network also makes it possible to run 

) and off-chain networks. It harnesses the BLS nodes and can extract data synergies to provide valuable services to other 

 organizations. Through Randcast's data utility services, people can generate the random numbers needed to maintain security, run gaming apps on off-chain networks, and produce digital advertising for NFT collections.

ARPA has already achieved many of the goals set out on its 

. After refining the SMPC process, they released a devnet in late 2022, a testnet in early 2023 and launched the mainnet in mid-2023. Alongside completing the main ARPA road map in a timely manner, the company has also worked on and launched Randcast as a secure and inexpensive way of randomly generating numbers.

Now that the main ARPA Network is up and running smoothly, ARPA is looking to the future for more applications for its highly scalable infrastructure. They hope to spend the rest of 2023 designing and launching a new version of staking that includes user delegation and nomination mechanisms. From there, their plan is to expand community governance, start 2024 with additional systems for running the ARPA community and expand their services to other blockchain networks.

 for the ARPA Network. The ARPA coin is used for community governance and provides rewards for nodes that help create privacy-preserving smart contracts.

The ARPA coin has a maximum and total supply of 2 billion coins, but only 982 million are currently in circulation. ARPA Network plans to gradually release more tokens into the circulating supply to increase volume without causing 

. As of Sep 4, 2023, ARPA’s market cap is $41 million, with a 24-hour trading volume of approximately $14.8 million. 

The current price of the ARPA token is around $0.04249601 (as of Sep 4, 2023), which is significantly lower than the highest price paid of $0.268622. Despite being down from that apex, many still believe ARPA is likely to increase in value. Data analysis from CoinCodex suggests that prices 

 for 2024 and increase to around $0.125059 in 2025. If everything goes well for ARPA Network, the coin has the potential to reach up to $0.30 in the future.

ARPA tokens are primarily used for managing the ARPA system. You can purchase them from crypto exchanges such as Bybit, which offers the ARPAUSDT Perpetual Contract. Get started by 

, funding it with cryptocurrency and navigating to the 

As one of the only ways to privatize data on Ethereum blockchain networks, ARPA Network certainly has a lot of promise. However, the ARPA coin is more of a utility token than an investing token. Fortunately, since the node operators ARPA relies on to extract data synergies are paid with ARPA, the company has an incentive to keep ARPA token values high and trading volume low. This means that it's a fairly stable investment. 

Prices may not skyrocket, but they're unlikely to plummet in value either. Ultimately, ARPA tokens are likely to be a solid inclusion in any investment portfolio. Of course, it’s recommended you still 

 before choosing to invest in any cryptocurrency, including ARPA.

ARPA Network's solution to Ethereum's privacy issue provides users with a secure, flexible and scalable way to prevent multiple entities from accessing their transaction data. Furthermore, the unique ARPA node system uses data synergies to provide random number generation services for a variety of other companies. Altogether, this is an exciting web3 project with numerous potentially useful applications.

ARPA Network (ARPA): Prioritizing Privacy Preservation

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards