Derive Protocol Tops $100M in TVL amid Surging Trading Volume

by

As a seasoned crypto investor with over a decade of experience navigating the volatile digital asset landscape, I can confidently say that Derive Protocol’s latest achievement of surpassing $100 million in TVL is nothing short of impressive. The record-breaking trading volume and active traders demonstrate an undeniable demand for derivatives related to Bitcoin and other cryptocurrencies.

The DeFi platform, Derive Protocol, has surpassed $100 million in Total Value Locked (TVL). This significant milestone comes after a series of impressive trading volumes and active traders per month. This recent achievement underscores the increasing interest in derivative products related to Bitcoin and other digital currencies.

Traders’ Demand for Options Drive Derive’s Record Activity

In an email, Sean Dawson, the Head of Research at Derive, noted:

Recent findings from Derive.xyz show a significant surge in growth and increased activity, as the platform’s Total Value Locked (TVL) exceeded $100 million for the first time. This milestone was achieved during a series of record-breaking weeks for trading volume and active traders.

This increase in Derive activity aligns with the significant interest in options tied to cryptocurrencies. It’s also driven by a preference for other investment tools related to digital assets, such as spot Exchange Traded Funds (ETFs) and stocks. Typically, options provide buyers an opportunity to either purchase or sell the underlying asset at a fixed price in the future.

In a similar fashion, making a call enables an investor to acquire an asset and shows optimism towards the market. On the other hand, a put reflects pessimism as it signifies selling an asset with the hope of buying it back at a lower price later. Not long ago, a whale amassed approximately $1.6 million in premiums through Bitcoin call transactions.

Indeed, the task was accomplished while holding a long stance in the immediate trading market. Of importance, the covered call tactic incorporated brief stances in March expiration call choices, with prices varying from $105,000 to $130,000.

If Bitcoin’s value does not surpass $105,000 by the end of March, this investor keeps the advantage. However, if there’s an increase in price beyond $130,000, losses from such a rally will be covered for those with positions in the spot market.

Sometimes, traders can deposit sUSDe (staked USDe) as security on Derive, allowing them to obtain USDC loans with a rate that is typically lower compared to other lending platforms. Here are the current details of USDC:

In simpler terms, earning sUSDe involves locking up Ethena’s USDe stablecoin as collateral. This sUSDe token can then be used to buy more USDe, creating a continuous loop or cycle in its usage.

Derive Protocol Records More Milestones

At the same time, Dawson highlighted that the deposit yield for USDC has spiked to 10% on Derive.xyz. Furthermore, it has achieved new records in both daily trading volume, peaking at $369 million, and monthly active trades with a count of 5,416.

On the Derive platform, you’ll find the Derive Chain, a system for confirming transactions. The Derive Protocol allows for decentralized, self-managed margin trading of futures, options, and spot markets. To go alongside this protocol, there’s also the Derive Exchange, functioning as a marketplace where orders are matched.

A week after Derive Protocol’s new partnership with Ethena Labs was announced, it has been reported that their TVL is growing. This collaboration will lead to the launch of Derive’s native DRV token on January 15, 2025. Derive will bring advanced trading tools like options, futures, and structured product vaults to this alliance, which Ethena will then integrate into its own operations.

One way to rephrase the sentence for better readability: Derive Protocol plans to increase its liquidity and trading activity by integrating Ethena’s stablecoin USDe, along with the leveraged version sUSDe.

Read More

2024-12-10 13:12