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

DeFi

ApeX Pro’s Smart Liquidity Pool (SLP) is the first market-making pool on an order book DEX that empowers any trader to act as a market maker via its automated market making strategies. 

Market making involves a combination of technical expertise, risk management skills, real-time decision-making and a deep understanding of market dynamics. Navigating the complexities of market making in the cryptocurrency space can be a daunting task, particularly due to its exclusive nature, tailored for professional traders well-versed in utilizing trading instruments and possessing a significant budget. The barriers to entry are notably elevated, making it an arena for the most proficient and well-equipped traders. 

Furthermore, the inherently decentralized nature of the 

 (AMMs) have added another layer of complexity for traders coming from the 

 (DEX), has taken a remarkable step by combining the features of 

 (CEXs) and DEXs to facilitate an effortless way for traders to earn from market making. Their latest offering, Smart Liquidity Pool (SLP), exemplifies their innovative approach by harnessing the power of both CeFi and DeFi to democratize market making. By leveraging ApeX Pro's SLP, traders can now easily access the benefits of market making without the complexities typically associated with it.

To fully comprehend the benefits of ApeX Pro’s SLP, we first need to understand what a 

 is. Liquidity pools play an essential role in providing liquidity to the DeFi space, as DEXs rely on them to facilitate decentralized trading.

 model that keeps a record of all trading activities and helps to negotiate. Based on this record, the exchanges then match the orders of buyers and sellers. Liquidity is guaranteed through professional and institutional traders, who act as money makers to create numerous bid-ask orders that match the orders of retail traders.

In the current landscape, some DEXs in the market built on the AMM model leverage liquidity pools in order to generate liquidity for trading platforms while facilitating user engagement. However, order book DEXs (which emulate CEXs) only permit professional market makers to provide liquidity, thereby limiting user participation.

ApeX Pro’s SLP is the very first order book DEX liquidity pool that functions as a market maker and leverages market making strategies while enabling decentralized user participation. This democratized participation opens up the role of market making to all users, instead of limiting such involvement solely to institutional and 

What Is ApeX Pro’s Smart Liquidity Pool (SLP)?

The first of its kind in order book DEXs, Apex Pro’s 

 (SLP) is a market making liquidity pool that empowers any trader to act as a market maker via its automated market making strategies. 

While usual AMMs employ a fixed formula to facilitate trade between two parties, thereby lacking the flexibility to adapt to the often volatile real-world market conditions, SLP utilizes dynamic statistical models that adjust to real market conditions and position management systems to generate profits with a high return-to risk ratio. 

Furthermore, thanks to its advanced automated algorithms and trading signals, SLP’s market-making strategies are more sophisticated than traditional CEX market makers, allowing it to trade a large volume of 

 efficiently. Compared to typical DeFi vaults, SLP’s advanced signal analysis and risk mitigation techniques help it to avoid unfavorable positions. 

Why Should You Provide Liquidity to Smart Liquidity Pool (SLP)?

SLP allows retail clients to engage as market makers on an order book DEX at a 

. With its pioneering outlook on enhancing liquidity, this innovative approach redefines the concept of liquidity provision in the world of DEXs. As a market maker, you not only contribute to the liquidity of ApeX Pro and ensure a healthy flow of transactions, but you also get to earn passive income in the form of stable high returns simply by depositing USDC. Adding liquidity to the SLP is incredibly easy, meaning anyone can become a market maker/liquidity provider with ApeX Pro.

Basically, by depositing your funds in the SLP you’ll gain instant access to market making strategies. This means any crypto enthusiast can enjoy the benefits of earning from market making without having to learn market-making strategies. Even traders with low capital can earn from ApeX Pro’s SLP.

SLP offers several attractive features for its liquidity providers. 

First, you’ll receive instant access to market-making strategies when you deposit a minimum of 100 USDC to the pool. Next, its automated algorithms help you capitalize on rapidly changing market opportunities at any time of the day without constantly monitoring trades. In addition, the automated trading system enhances liquidity with increased order book depth and substantial 

Finally, you can be assured of solid security from malicious online attacks, thanks to ApeX Pro’s use of 

, a Layer 2 secure scalability engine from 

 risks usually associated with liquidity pools used in AMMs.

Since SLP uses automated trading algorithms for market making, it offers multiple advantages over traditional market making.

SLP's real-time reactive automated market-making strategies respond rapidly to market price movements and automatically adjust prices. The ability to adapt to actual market conditions also distinguishes SLP from conventional AMMs that rely on fixed formulas.

Providing liquidity and implementing trades 24/7. 

Automated algorithms allow the strategy to operate around the clock, so users don’t have to constantly keep track of price movements.

 Users don’t need to learn market-making strategies and create numerous bid-ask orders; they simply deposit liquidity to the pool to earn stable yields.

SLP continuously places buy and sell orders through its automated strategies. This active engagement narrows bid-ask spreads, enhancing ApeX Pro's liquidity. As a result, it smoothes interactions between buyers and sellers, making it easier to find counterparties for trades. In the long run, SLP will result in an increased order book depth, reduced slippage and an overall improved trading experience for ApeX Pro traders.

However, SLP isn’t without risks, such as position loss if asset prices change adversely, and slippage while entering or exiting the pool, particularly during extreme market conditions.

That said, compared to usual AMMs and DeFi vaults, these risks are significantly reduced because Smart Liquidity Pool’s use of statistical models to forecast market conditions and assess portfolio performance enables it to adjust its market making strategy accordingly. 

Additionally, SLP reduces exposure to volatile assets such as 

, since positions are automatically monitored and adjusted to market conditions, projected trends and volatility.

How to Add Liquidity to Smart Liquidity Pool

Adding liquidity to SLP is easy. First, you'll have to transfer your assets from your wallet to your ApeX Pro account. Next, deposit USDC into SLP, and you get to earn a share of the returns generated by the market-making strategy.

After choosing the amount of USDC you wish to deposit into SLP, you can view your total Pool Shares. Once your subscription to the pool is confirmed, you’ll begin accruing yield over time.

The pool subscription and yield calculation are determined daily, with the yield automatically compounded to generate higher returns. Regardless of your subscription time, your earnings will be settled uniformly at 4AM UTC the next day. Once the daily settlement time arrives, you can withdraw your earnings, which will be paid out in real yield in USDC.

To retrieve your earnings, you can select the total amount of Pool Shares to withdraw. Please keep in mind that although the number of Pool Shares you hold remains constant, the amount of your total yield is subject to the exchange rate (

ApeX Pro's Smart Liquidity Pool (SLP) is driven by the vision of democratizing market making, combining the best of CeFi and DeFi to provide all crypto enthusiasts with effortless access to market-making benefits. With features such as automated trading algorithms, enhanced security and instant access to market-making strategies, Smart Liquidity Pool allows crypto users of any background and experience to participate in market making. 

By employing market-making strategies, individuals can generate a passive income stream and receive real yield in USDC. SLP’s unique methodology is grounded in statistical models that offer real-time reactive market-making strategies, ensuring agile adaptation to market fluctuations that distinguishes it from conventional AMMs. 

With ApeX Pro's Smart Liquidity Pool, all users can reap effortless returns from market making.

ApeX Pro Smart Liquidity Pool: Democratizing Market Making

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards