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

Blockchain

Explainers

Altcoins

Spectral (SPEC) is revolutionizing blockchain and DeFi by offering decentralized oracles that provide insights from AI and ML inferences.

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Many niches within the blockchain industry, particularly the 

 applications to update and track prices, verify off-chain data and enable a variety of cross-app communication activities. So far, the use of blockchain oracles has been limited to supplying only raw data.

Spectral is an innovative decentralized project. It champions the idea of oracles that provide not just data, but insights and inferences from artificial intelligence (AI) and machine learning (ML) models. Read on to learn about Spectral's innovative combination of AI and blockchain.

 (SPEC) is a decentralized platform that offers two core products — Spectral Nova, a network of AI and ML models that can feed inferences and insights from their computations into blockchain smart contracts and apps, and Spectral Syntax, a generative AI tool that lets you easily create smart contract programming code based on textual prompts.

Thanks to the Spectral Nova platform, blockchain smart contracts can accept not only data but also inferences — i.e., results and solutions of AI and ML algorithm computations. These AI and ML algorithms are contributed by data scientists who receive crypto rewards for their contributions. The models are stored and shared in a decentralized way, and their integrity and quality are ensured through the work of special Validator and Creator 

Spectral Syntax allows you to generate production-ready code in the Solidity programming language for smart contracts that automate various activities, such as token creation and distribution, asset transfers and other common web3 operations.

Spectral Nova (Machine Intelligence Network)

's concept is somewhat similar to a decentralized marketplace that brings together creators and consumers of AI and ML models. However, the network's setup is a tad more intricate than the simple dualistic provider-consumer relationship. There are four different actors on Spectral Nova, each with its own unique role.

 is a generative AI tool that lets you easily create smart contract programming code using textual prompts. The Syntax tool has been optimized based on a range of large language models (LLMs). In some ways, Spectral Syntax is quite similar to the ubiquitously popular ChatGPT.

The key difference is that ChatGPT is a general-purpose tool, whereas Spectral Syntax has been optimized to assist developers by generating high-quality code in the Solidity programming language — the default language used for smart contract development on 

 (EVM)-compatible blockchains. Developers can test and edit the code before directly deploying it 

The Spectral Syntax tool is primarily intended to help create AI-based, autonomous on-chain agents, software modules that automate some functionality or process within a web3 app or even a 

. Thanks to the use of AI algorithms, these agents can incorporate functional details that ordinary smart contracts might not be capable of — e.g., learning and adapting based on experience or user input, or utilizing predictive analytics and forecasts.

AI agents created using Spectral Syntax are envisioned to be hosted on a dedicated decentralized network, 

, slated for initial release in Q4 2024 with mainnet launch planned for 2025.

While Spectral's AI/ML models and inferences can be applied in various areas and industries, there's one specific area of focus for the project team: DeFi — or, more specifically, DeFi-oriented credit risk assessment. Spectral envisions a future web3 world where all actors (e.g., individuals, borrowing and lending protocols, and other entities involved in crypto financing operations) have credit scores based on their on-chain activities.

Naturally, such a decentralized credit score is unlikely to be reliably computed the way it's done in traditional finance. Spectral proposes a credit scoring system for web3 that will help derive on-chain scores of creditworthiness. Using this system, all on-chain actors will have an equivalent of the traditional FICO score. The scoring will be based on variables such as on-chain transactional activity, verifiable ML computations and zkML proofs, decentralized credit modeling and so on. 

By proposing an on-chain equivalent of the credit risk infrastructure that traditional finance institutions have used for decades, Spectral hopes to improve capital efficiency and the flow of digital assets in the DeFi industry and to introduce safer lending and borrowing practices.

Spectral's interest in creating such a programmable creditworthiness ecosystem isn't unusual — predictive analytics based on AI and ML algorithms are already widely used in the finance industry for credit risk analysis — and the project hopes to leverage its focus on AI and ML inferences in this area.

Spectral's native cryptocurrency is SPEC, an 

 token extensively used throughout the platform's ecosystem for a variety of functions, including the following:

SPEC's total and maximum supply are 100 million. As of May 14, 2024, it’s 

Where to Buy the Spectral Crypto Token (SPEC)

You can trade the SPEC token on Bybit as a Spot pair (

). If you don’t have a Bybit account, you can easily 

 to access a vast range of crypto products and assets.

You can also take advantage of Bybit's campaign (running from May 6 to May 17, 2024 at 9AM UTC) dedicated to the SPEC token to grab a share of the 

. The campaign is split into two parts: the first is a 100,000 USDT prize pool Deposit to Earn event that’s exclusive to new users, while the second lets you earn from a prize pool of 50,000 USDT by trading SPEC.

To say that AI models are taking the world by storm is probably an understatement. Spectral, with its specialization in AI and ML inferences and their practical applications, stands to greatly benefit from this development. The platform's Nova product is essentially the first web3 oracle that feeds ready-to-use AI inferences, not just raw data, into decentralized apps (

) and smart contracts. This can potentially take smart contract functionality to a new level — from rule-based computations to AI-powered smart decisions. Thanks to Spectral Nova, we might soon think of blockchain smart contracts as intelligent and self-learning agents.

Spectral Syntax is also a unique product — the first AI-based tool specifically trained to generate production-quality Solidity code for AI agent development. With its duo of novel products, the Spectral platform is a worthy addition to the emerging industry sector at the intersection of AI and blockchain. 

Spectral (SPEC): Expanding the Capabilities of Blockchain With AI

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards