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

DeFi

Altcoins

Alpaca Finance is the first leveraged yield farming and lending protocol native to BNB Chain that provides DeFi investors with a wide range of products.

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 is a critical component of decentralized finance (

) in which investors get to lock their tokens and 

 through various yield-bearing opportunities.

While the DeFi ecosystem may be saturated with a wide range of yield farming products, Alpaca stands out as the first platform to offer investors leveraged yield farming via 

, offering them vast multiplying farming opportunities. The platform brings lenders and borrowers together with undercollateralized loans, further maximizing profits.

Initially, Alpaca Finance had focused on leveraged yield farming but has since diversified into more products, such as 

, lending, a Perpetual Futures exchange and Automated Vaults to encompass a wider user base in the crypto space.

Let's take a deeper look at the Alpaca Finance project to see why it's causing such a stir in the world of DeFi.

Alpaca Finance is a novel blockchain-based protocol on BNB Chain that provides DeFi investors with a wide range of products, such as leveraged yield farming opportunities, lending, Automated Vaults, Perpetual Futures exchange and NFTs through a capital-efficient structure that maximizes profits.

Launched in 2021, Alpaca Finance’s first version, AF1.0, focused on its core product, leveraged yield farming, which allowed lenders to earn stable and safe yields while borrowers could access undercollateralized loans.

However, in 2023, Alpaca upgraded its protocol to AF2.0, expanding its offerings to include overcollateralized lending, tiered asset lending, cross-margin leveraged yield farming, multi-token farming and other highly flexible yield-bearing strategies.

Alpaca’s team chose to launch on BNB Chain due to prohibitively rising costs on 

 and the lack of an on-chain leveraged yield farming protocol in the popular ecosystem. The project held a fair launch with no investors, pre-mining or pre-sales. Those who help bootstrap its ecosystem are rewarded using the platform's economic and 

In its efforts to expose DeFi enthusiasts to numerous opportunities, Alpaca Finance offers a broad suite of products tailored to ensure simple, profitable and capital-efficient investing.

The platform concentrated on leveraged yield farming and lending for its first version, AF1.0. However, Alpaca has since upgraded to AF2.0 to include more products. With the move to AF2.0, Alpaca Finance announced it would be sunsetting its stablecoin, Alpaca USD (AUSD), and users would need to swap to 

The following are Alpaca’s core products.

Alpaca Finance launched into DeFi by offering a unique product missing on BNB Chain, namely leveraged yield farming. This product lets users enter into leveraged yield farming positions with an 

 of up to six times their capital. The three main components of Alpaca’s leveraged yield farming product are lenders, yield farmers and liquidators.

Lenders deposit their assets into Alpaca’s lending vaults to create safe and stable yields from the fees generated by the leveraged positions. Yield farmers can then borrow from these lending vaults and use the borrowed assets to open leveraged farming positions for farming yields of up to 6x (the mechanics of the process are powered by Alpaca’s 

The liquidator then helps to monitor the health of all the leveraged positions based on designated parameters. Should the position exceed these parameters, the liquidator will proceed to liquidate the position and earn a 5% reward. Fully 100% of the rewards earned go to ALPACA buyback and burn, ensuring that token holders still gain from the appreciating value of their ALPACA tokens even as their positions are liquidated.

Currently, leveraged yield farming supports BNB, ALPACA, CAKE, ETH, 

. In order to facilitate this product, Alpaca has integrated with 

Alpaca’s Lend product provides another profit-making strategy. You can lend your assets to sustainably earn high yields, since Alpaca's innovative technology empowers borrowers with remarkable capital efficiency, enabling them to open undercollateralized loans for yield farming. The deposited tokens aren’t locked, and no deposit and withdrawal fees are charged, giving lenders flexibility and assurance.

Once you make your crypto assets available to borrowers, you'll receive Alpaca's ibTokens (interest-bearing tokens), which represent and track your share of assets that you've deposited into the lending pools. Once you deposit BNB into an Alpaca lending pool, you'll then receive ibBNB tokens, which will then earn interest over time. The longer you hold your ibTokens, the more valuable they become.

Automated Vaults (AVs), an innovative product on Alpaca, execute complex investment strategies on your behalf. Think of the AV as a hedge fund that’s on-chain. AVs on Alpaca run according to either of the following plans:

Alpaca's AVs have gone through two versions and are now on the third, AVv3, which integrates concentrated liquidity from decentralized exchanges (

. Some of the key features of AVv3 include variable leverage, exclusively on-chain transactions, auto-hedging, auto compounding, zero liquidation risk, modular design (compared to AVv2) and no lockups.

Governance Vault is a model designed to incentivize users to lock up their ALPACA tokens where they receive xALPACA tokens, which qualify them for rewards and voting power. The model design was forked from 

 governance structure. You may lock your tokens for a minimum of seven days up to a maximum of one year. The longer you lock them, the more xALPACA tokens you'll earn. Rewards are distributed weekly.

Alpaca's Perpetual Futures exchange allows investors to open trading positions with no expiration date. Rather than your position expiring, you continue to pay fees to keep it open. Such a design saves you the cost and hassle of rolling over a position upon expiration.

It also ensures responsive hedging, since you can swiftly adjust the position depending upon the market. Another significant benefit of this “perpetuity” is that it aggregates deep liquidity, which provides high leverage even for large trading positions.

Alpaca's Perpetual Futures exchange comprises traders and liquidity providers. As a trader, you can open high leverage of up to 50x for long/short positions without 

 at a minimal cost, and with no centralization risk.

, on the other hand, provide liquidity through an index fund consisting of major cryptos, such as BNB and ETH, and stablecoins like 

. In return, you'll earn yields from various fees, such as those collected from borrowing, swapping and liquidity pool deposit/withdrawal. Of the 16% fees generated, 10% is used to buy back ALPACA tokens and distributed as rewards to users who have staked in the Governance Vault, while 6% goes to weekly buybacks and burns.

Alpies is a collection of 10,000 Alpaca NFTs available on BNB Chain and Ethereum. There are two types of Alpies: Dauntless (for BNB Chain) and Dreamers (for Ethereum). These NFTs can be bridged between the two chains and traded on NFT marketplaces such as 

. Twenty percent of the sales proceeds from Alpies are given to ALPACA holders to facilitate the token’s buyback and burn program. Meanwhile, 5% of the proceeds are donated to charities working with actual alpacas.

ALPACA is the native token of the Alpaca Finance platform. It entered the market as a fair launch project in 2021 with a maximum supply of 188 million tokens.

Of the total ALPACA supply, 87% was distributed to Alpaca users, 8.7% vested by the team for two years and 4.3% allocated for future strategic expenses. ALPACA acts as both a governance token to give holders voting rights, and as a 

 for fees to facilitate the platform's buyback and burn program.

ALPACA features a long-term deflationary design whereby the number of tokens distributed decreases over time, leading to an increase in value. Furthermore, ALPACA’s buyback and burn program also increases the price of the token over time by creating scarcity

As of Oct 19, 2023, ALPACA’s price was $0.16, a 98.21% drop from its all-time high (ATH) of $8.78 and a 23.97% increase from its ATL of $0.13.

Price forecasting experts are relatively bullish on the ALPACA token. According to experts at PricePrediction, 

 $0.51 by 2025 and increase to a maximum of $3.52 in 2030. Meanwhile, DigitalCoinPrice is 

, forecasting the token could reach $0.57 in 2025 and increase to $1.65 in 2030.

Alpaca Finance has already created a name for itself in the leveraged yield trading niche in DeFi. As a pioneer in this sector, Alpaca has a strategic advantage for investors looking to diversify their portfolio. Its numerous yield-bearing products provide a wide spectrum of investment options designed for capital-efficient implementation.

Furthermore, the upgrade from AF1.0 TO AF2.0 increases options for investors. The newest version diversifies investment baskets to include more products like the Perpetual Futures Exchange and Governance Vault, and also introduces over-collateralized debt, which contributes to improved risk management. Additionally, Alpaca keeps innovating and refining its products, as witnessed by the revamp of its Automated Vaults to attract more DeFi users.

ALPACA’S deflationary tokenomics, via its buyback and burn design, will ensure that the token remains scarce. This could further drive up its price over time.

Based on these considerations, we believe that Alpaca Finance is a potentially profitable project and could prove quite valuable in the future. However, this isn’t financial advice. We highly recommend that you 

You can buy ALPACA tokens on Bybit’s exchange as a USDT perpetual contract (

). Simply sign up on the platform, register, get verified and start trading ALPACA, along with many other cryptocurrencies.

DeFi enthusiasts’ needs are dynamic. Alpaca Finance has designed a unique angle to cater to these needs and aims to be the largest lending protocol in the space. Even as the fast-paced world of DeFi continues to evolve, Alpaca Finance has kept up by diversifying from leveraged yield farming and lending to providing a wide range of products that include Automated Vaults and a Perpetual Futures exchange.

Whether you’re a yield farmer, lender or liquidity provider, Alpaca Finance provides a safe and lucrative way for you to put your tokens to good use. 

Alpaca Finance (ALPACA): Maximizing Profits for Lenders and Borrowers

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards