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

So, is NFT dead? We explores the state of NFTs and how the future of digital art may likely play out. Learn more.

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Non-fungible tokens (NFTs) have gained mainstream recognition, changing how we perceive art, ownership and value. However, with the crypto winter in full swing, the total 

 fell from $10.7 billion in Q4 2022 to $4.7 billion in Q1 2023, representing a whopping 53% drop. Current market sentiment appears to have locked NFTs in the grip of a ferocious bear market, leaving us to wonder if this is just a brief pause in their meteoric rise — or the tragic final act. Are NFTs dead, or are they simply struggling through a bear market? 

This article explores the state of NFTs and how the future of digital art may likely play out.

The NFT landscape can feel like a vast and vibrant digital bazaar, with platforms like OpenSea and Blur acting as bustling marketplaces for these unique digital assets.

NFT trading volume reflects the amount and value of NFT transactions within a given period. 

, secondary market OpenSea remains a frontrunner in NFT trading, taking the crown as the world's largest NFT marketplace with a reported trading volume of $1.4 billion in Q1 2023. However, this pales in contrast to the $2.7 billion in trading volume posted by Blur, a new entrant. Blur's rapid rise to dominance in the NFT industry can be attributed to its incentive schemes, zero-fee trading model, intuitive interface and a wide variety of NFTs offered. 

While it's premature to predict whether Blur can sustain its leading position, its robust initial performance suggests a promising future in the NFT marketplace.

NFT Demand: Ethereum vs. Solana vs. Polygon

Ethereum, Solana and Polygon are key blockchain players in the NFT landscape, each presenting unique advantages and challenges which can affect the NFT demand on that chain. 

Ethereum, the first and most popular blockchain for NFTs, boasts a large, well-established community but suffers from high transaction fees. It’s home to some of the most popular NFT collections, such as 

Solana, with a blockchain designed for faster and cheaper transactions, is the relatively new contender, swiftly rising to the second spot, despite occasional outages. Its transaction fees are much lower than Ethereum’s, and its transaction speed is much faster.

Polygon, a Layer 2 Ethereum scaling solution, provides an economical alternative for executing transactions, making it attractive for NFT projects prioritizing lower fees. However, it’s not as popular as Ethereum or Solana. The choice between these blockchains largely depends on cost, scalability, security and available NFT projects. While Ethereum maintains its lead, Solana and Polygon are fast gaining popularity due to their lower fees and faster speeds.

A significant factor affecting the NFT market is the overall cryptocurrency market, as NFTs are largely tied to cryptocurrencies like Ether (ETH). Thus, market dips or rises in the crypto world can directly impact the NFT market. The current NFT decline can be attributed to the general crypto bear market.

The broader economic environment also influences NFTs. For instance, changes in interest rates or stock market performance can sway investor behavior, affecting the NFT market. Consumer trends also play a vital role. As NFTs are still a relatively new concept, their popularity can fluctuate based on public perception and acceptance.

Governments worldwide are still figuring out how to regulate cryptocurrencies and associated assets, such as NFTs, meaning that new laws are imminent and can trigger market uncertainty. Under these various influences, the NFT market's future trajectory remains an intriguing, albeit unpredictable, journey.

The number of active NFT wallets has been 

 since its peak in Jan 2022, suggesting a loss of interest. In addition, the average price has been falling since its Apr 2021 peak.

A possible reason for this seeming loss of interest is that the market has become saturated, making it tough to find high-quality NFTs worth investing in. Also, news of fraud involving NFTs has made people wary of investing in them.

However, being in its early stages, the NFT market is still subject to a rapid cycle of hype and disappointment, and the possibility of interest picking up again is very high, given the number of exciting new NFT projects in the works.

Moving away from the initial speculative hype, the future of NFTs remains bright. Diversifying from digital goods and art, NFTs have found various use cases in sectors like music, sports and virtual real estate, birthing new asset categories.

NFTs give players ownership of in-game assets in gaming, opening doors for game development and player engagement. Advancements in blockchain technology, such as Ethereum's Layer 2 solutions, also enhance NFT accessibility by reducing environmental and transaction costs.

Furthermore, the evolution of decentralized finance (

) provides an encouraging environment for NFTs, opening up unique uses from serving as loan collateral to representing specific financial products.

What Could NFTs Be Used for in the Future?

The unique utility of NFTs to establish ownership and authenticity in the digital world allows for countless innovative applications across various industries. Here are a few possibilities:

The Pros and Cons of Investing in NFTs Today

Investing in NFTs can be exciting and daunting. However, like any investment, it comes with its share of advantages and potential pitfalls.

The fast-paced, roller-coaster NFT space features thrilling highs and daunting dips. However, remember that NFTs are much more than speculative assets. They represent a new form of digital ownership with diverse applications across industries such as art, music, gaming and real estate.

However, caution is paramount in this evolving field. Just like any crypto market, the NFT market's volatility, scam potential and environmental concerns tied to blockchain transactions make careful, informed engagement crucial. While the current bear market may raise questions about NFTs' longevity, their unique utility suggests they’re here to stay, albeit in potentially evolving forms and contexts. The journey of NFTs is just beginning, and it promises to be an exciting one.

Is the NFT Dead, or Just in a Bear Market?

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards