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

DeFi

Blockchain

DeFi Analytics is essential for traders to dive deeper into a project's longevity. Learn how to use Dune Analytics to source these date effectively.

AUG23_R11_Trendjacking_How_to_Use_Dune_Analytics_to_Find_Crypto_Data_Easily.png

One of the biggest issues facing many web3 users is the difficulty of getting up-to-date crypto-related data. Being able to analyze crypto sector trends at a macro level can be vital to a trader’s success, particularly if the market is about to switch from bull to bear or vice versa. Thankfully, a company called Dune Analytics has discovered a way to simplify that process.

 company that offers users information for many parts of the crypto sector, including DeFi exchanges, NFTs and much more. The program allows users to create visualizations, known as 

, which can then be sent to other people. They’re also displayed for free on the project's website, which allows users from around the world to benefit from the knowledge gleaned from the queries.

The team behind Dune includes co-founder and CEO Fredrik Haga, co-founder and CTO Mats Olsen, Chief of Staff Hannah Smith and Head of Finance Gurmaan Suri. Haga and Olsen were co-workers in Norway until they both decided to quit their jobs and focus on creating a crypto data analytics platform.

The program works by using SQL search commands to find publicly available blockchain data, which is then converted into charts and bar graphs. From there, the information can be converted into a visualization. These dashboards then allow users to display the information pertinent to their needs for projects, presentations, members of the community and others.

Other apps may require logins or subscription fees, but on Dune all information is free and open-source. It’s completely community-driven, to the point that nearly all dashboards are available for the public, except those that premium users have elected to make private (which we'll get into a little later).

Dune’s speed sets it apart from similar apps. For example, traditional companies release quarterly or annual reports that explain the company’s finances to shareholders. Since web3 moves significantly faster, however, data needs to be available more frequently than every three months or once per year. Dune’s parallel query system, which provides fast data analysis, works faster than manually searching the blockchain.

The program uses a special version of the SQL programming language, known as 

, to access the information. Luckily, only a basic knowledge of SQL is required for most searches, and with the advent of 

 and other free available AI software, users with no programming language knowledge can quickly and freely generate the code needed.

 queries were permitted through the Dune engine. However, these were recently sunsetted at the end of July 2023. Using the 

, Ethereum V1 and SparkSQL queries can be migrated to DuneSQL, allowing them to be submitted into the system.

Dune's community-driven platform can help you identify market trends, for instance whether the crypto sector outlook is 

. It can also provide valuable information about NFT marketplaces, such as OpenSea. Many popular existing dashboards have already been set up to monitor things like trade volumes, trade activity by the largest accounts and number of daily transactions, among others.

In short, Dune can help give you a better understanding of web3 activities and identify trends.

As an analogy, consider baseball: more casual fans might look in the newspaper to see whether their teams have won or lost that day. Basic statistics like 

 reveal which players are currently performing well, or have done so during the current season. However, advanced analytics like 

 can reveal whether or not that player's good statistics are sustainable and can be expected to continue. If a pitcher is lucky instead of accomplished, they could be outperforming their expected results and eventually perform quite poorly.

Similarly, crypto analytics like those provided by Dune can reveal trends that tell an investor or a company whether the market is due for a correction, or is expected to continue increasing in value in the near future. Of course, in both baseball and crypto, results aren’t guaranteed, and anything can happen. However, being armed with a correct analysis of the underlying metrics can make the job of predicting future outcomes both simpler and easier.

How to Use Dune Analytics to Your Advantage

By customizing the Dune platform's dashboards, users can convey exactly the information that they want to highlight — and only that information — allowing them to create the perfect graphs or other visuals that won't clog up the screen at presentations with excess data.

 Tab, users can view public dashboards that others have already set up without needing to create an account. With the wealth of knowledge already available, including many pre-made queries available on Dune's website, this can be a valuable time-saving tool for the crypto user in a hurry.

To create a new dashboard, a registered user simply clicks on 

 and enters an SQL code related to an NFT, crypto or DeFi project. Using a process known as the parallel query, the long and arduous task is split up by the compiler into multiple smaller queries, which means users receive their results much more quickly.

Once a query is submitted, the output will be in the form of a bar graph or chart. These can then be converted into dashboards, which allow the user to display the information in a way that’s both visually pleasing and informative.

It’s also a great way to discover new and upcoming projects, which benefits both users (who can use the knowledge already discovered) and the project (by helping out with additional research or queries). Examples of popular projects on Dune's website include 

Dune Analytics offers three levels of service: Free, Pro and Premium. A Pro subscription is $399 per month, and the Premium tier currently sells for $999 per month. Users with paid subscriptions receive more credits, allowing them to create even more visualizations per month. They also receive other perks, such as 

Whether a premium subscription is worth it for an individual or group depends entirely upon their unique situation. However, in most cases, the answer will be yes.

To determine whether a premium subscription is worth it, user(s) only need to ask a single question: "Can I (we) use the information to increase my (our) crypto portfolio by more than $399 or $999 a month?" If the answer is yes, then the information will pay for itself while also providing great value.

For web3 businesses, particularly those that regularly trade high amounts of cryptocurrency and/or NFTs, the need for a Dune Premium subscription is much easier to understand, especially compared to the thousands of dollars per month that similar companies often charge.

Even a smaller organization, such as one that only handles roughly $1,000 in crypto per day, would benefit from the premium subscription. Amortized, $999 per month is a little more than $30 per day. The benefits of increased knowledge, personalized to a business's exact needs and financial situation, almost certainly render the cost of the service trivial.

The information generated by the database won’t change based on the subscription tier used. However, a paid plan will increase the volume of information that can be queried from the database every month. A greater number of queries will provide more information, and therefore generate more money, assuming the data is properly analyzed.

Dune has revolutionized the crypto sector by allowing free access to publicly available blockchain data, which can help web3 users maintain more successful crypto wallets and better understand trends in the crypto, NFT and DeFi sectors. A premium subscription will likely be helpful for power users, but existing dashboards can be viewed without any account at all.

How to Use Dune Analytics to Easily Find Crypto Data

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards