Why Onchain Options Are Finally Working: Derive's 90% Market Share and What's Next?

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Mar 26, 2026

Nick Forster, Co-founder and CEO of Derive — former institutional options trader who built Derive’s CLOB and RFQ market structure. He explains why on‑chain options finally took off, how RFQ and institutional flows unlocked scale, the role of Yieldmageddon pushing funds to options, and why Derive’s network effects and product design created a dominant market position.

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INSIGHT

Current Markets And Volume Split

Live markets: Bitcoin, Ethereum, Hyperliquid and Solana options, with expiries from zero/one day out to later in the year.
Bitcoin accounts for ~50–60% of volume; Hype and ETH ~20% each; SOL recently launched and growing.

INSIGHT

Hyperliquid Would Struggle To Copy Options

Hyperliquid's proposed binary options differ from Derive's non-linear options; integrating perp liquidity is possible but requires large risk-engine changes.
Nick argues dedicated teams win because options need 40%+ focus and different margins than perps.

INSIGHT

Why Options Markets Are Sticky

Options have strong network effects because positions tie up capital for months, incentivizing market makers to quote tighter and stay on the same exchange.
Slow-moving institutional users care about security and execution, making migration away costly.

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Nick Forster is CoFounder and CEO of Derive.

Every year since 2021, we've said onchain options would be huge, but it's never played out, until now. Derive has captured 90-95% of onchain options volume while competitors all died or pivoted to perps. The inflection point has arrived.

In this episode, Nick explains why he stayed the course building the hardest product in DeFi, how Yieldmageddon is bullish for the growth of options, and why institutional funds are now turning to onchain options for yield generation. The thesis was right. The timing was just early. And the network effects now make Derive's moat nearly impossible to replicate.

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⏱️ TIMESTAMPS

0:00 - Intro
2:27 - Why Nick bet on onchain options in 2021
4:10 - Derive is the largest onchain options exchange
5:28 - Building “the infinite payoff factory”
11:59 - Why not pivot to perps when everyone else did
14:00 - The inflection point: What changed in the last year
16:37 - How RFQ (request for quote) works for institutional size
18:04 - Yieldmageddon, the end of the basis trade and TVL deals
22:19 - Vaults and structured products being built on Derive
24:17 - Is there an LP pool-style product being built for Derive?
25:17 - From Lyra's AMM to Derive's CLOB
28:20 - What options markets are live today?
29:09 - Which networks Derive supports via its appchain
30:26 - HYPE options driving new growth
31:36 - What if Hyperliquid launched options?
35:53 - Why options markets have stronger network effects
39:17 - Will Derive support RWA options markets?
44:14 - Who trades on Derive?
46:13 - Growth charts: From 0.15% to significant market share
48:43 - Why options are countercyclical
51:09 - DRV token: All value flows through the token
55:08 - The story behind Synthetix’s acquisition proposal
57:43 - How big can Derive grow in options trading?
1:00:27 - What's next?
1:02:03 - Closing

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🔗 GUEST LINKS

► Derive website: https://derive.xyz/
► Derive on X: https://x.com/derivexyz
► Nick on X: https://x.com/itseneff

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DISCLAIMER: Nothing said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed by hosts or guests on the show are solely their opinions. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this podcast.