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

Blockchain

Bifrost is cross-chain, liquid staking derivatives issuer focused on Polkadot’s ecosystems, including its parachains and relay chains.

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Due to the increasingly proven inefficiencies of 

 (PoW) blockchains, a growing number of blockchains have adopted 

 (PoS) consensus mechanisms to secure their smart contract ecosystems through 

. With this growth, a rapidly burgeoning niche has emerged in 

 (LSDs), they facilitate the staking of assets locked in PoS blockchains to provide liquidity and ensure optimal capital efficiency for asset holders.

The concept of LSD finance (LSDFi) has been taken a notch higher by the creation of heterogeneous cross-chain liquid staking platforms (such as 

) that facilitate multi-chain staking of interest-bearing LSDs.

In this article we’ll explore Bifrost Finance, a cross-chain LSDFi protocol serving parachains operating on 

 is a web3 cross-chain derivatives protocol designed to provide standardized, decentralized cross-chain liquidity for LSDs, with a focus on Polkadot relay chains and parachains, and heterogeneous chains bridged by Polkadot.

As the pioneer LSDFi project on Polkadot, Bifrost leverages Substrate technology and the Cross Consensus Message Format (XCM) to offer faster, cheaper and highly interoperable cross-chain liquid staking across nine blockchains, including 

Initially, Bifrost was launched on Kusama in October 2021, but it officially became a Polkadot parachain in June 2022 after a successful Polkadot Crowdloan auction that raised 403,658 DOT (worth around $2,022,327 at the time). Its mainnet has since migrated from Kusama to Polkadot, with BNC as the only native token for the project.

As a liquid staking parachain, Bifrost aims to aggregate liquidity from staked assets on PoS networks and convert them into interest-bearing derivatives, which helps increase capital efficiency for token holders.

Similar to popular LSD protocols such as 

, Bifrost issues reward-bearing tokens (vTokens), which are swapped at a ratio of 1:1 to the underlying assets, and can be used to earn yields across compatible chains in the DeFi ecosystem.

To achieve this decentralized re-staking of PoS tokens, Bifrost has developed the Staking Liquidity Protocol (SLP) and Slot Auction Liquidity Protocol (SALP) to improve liquidity on Polkadot’s StakeFi ecosystem.

The Bifrost platform combines several different features to unlock diverse opportunities for its users through a number of innovative liquid staking mechanisms. After significant research, the Bifrost team settled on the idea of creating wrapped assets that simplify staking and unstaking, ensuring quick redeployment of underlying assets to leverage a wide range of income streams.

The key features of Bifrost’s StakeFi ecosystem are as follows.

The Staking Liquid Protocol (SLP) was the Bitfrost’s earliest liquid staking platform. SLP uses XCM to mint vTokens, which are wrapped staking assets that can be used to provide liquidity and earn rewards from PoS assets locked in various blockchains. SLP utilizes Polkadot’s Nominators Pool, which helps lower barriers to liquid staking that have vexed the LSDFi niche.

By depositing your staked assets in the Bifrost SLP Nominators Pool, you not only get to mint interest-bearing vTokens but you also benefit from a lower 

. This is because the SLP Protocol takes on the risk for all vToken holders and employs several countermeasures, including the rapid switch of validators should a slash occur.

The Slot Auction Liquid Protocol (SALP) was developed to facilitate the release of liquidity for locked assets on Kusama and Polkadot by those participating in the Crowdloan auction initiative. The flexible lockup of derivatives encourages users to lock their DOT and KSM assets in order to participate in Crowdloan auctions.

SALP issues LSDs in the form of vsToken (vsDOT/vsKSM) or vsBond derivatives, which represent a user’s equity and redemption parameters in a given parachain. vsTokens are fungible and represent a participant’s contribution to the auction, and can be sold at any time in exchange for the original token. 

Meanwhile, the vsBond is a token that symbolizes the specific parachain and the amount of time that the user has leased their tokens to the auction. SALP then uses a bond market to pair a specific vsToken and a vsBond, based on their yield opportunities and redemption period, into a 1:1 redemption package.

Bifrost Native Coin (BNC) is the mainnet utility token of Bifrost, with an initial total supply of 80 million. BNC helps capture value and promote the healthy development of the Bifrost ecosystem through the following mechanisms:

As of Aug 16, 2023, BNC’s price was $0.225, a 96.31% drop from its all-time high (ATH) of $6.14 on Nov 03, 2021, and a 193.18% increase from its all-time low (ATL) of $0.077 a year later, in November 2022. Price prediction experts aren’t overly bullish on BNC's future value

According to forecasters at PricePrediction, 

, and could increase in price to $4.42 in 2030. Another platform, DigitalCoinPrice, 

 and believes that BNC could hit $0.83 in 2025 and rise to a maximum price of $2.34 in 2020.

LSDFi is one of the fastest-growing niches in DeFi. As an entrant in this category, Bitfrost also provides cross-chain liquid staking, which ensures capital-efficient and high-yielding opportunities for PoS asset holders.

In addition, Bifrost has focused on Polkadot’s thriving ecosystem of parachains and relay chains, which have attracted a lot of developers, due to the advanced security and ease of building. Those who lock assets in this blockchain will better be able to utilize their funds through Bifrost’s liquid staking mechanisms.

Based on the bright future of LSDFi projects and the endless possibilities Polkadot presents, we believe that Bifrost is a good investment. That said, this shouldn’t be taken as financial advice, and we highly recommend you 

As a pioneer of LSDFi on Polkadot, the Bifrost network has presented stakers on the blockchain with strategic value capture for their locked assets through cross-chain liquid staking, and its innovative SLP and SALP platforms provide users who lock their native tokens with the opportunity to earn additional rewards from vTokens, vsTokens and vsBonds across multiple chains. 

Bifrost (BNC): Cross-Chain Liquid Staking for More Rewards

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards