On-chain options trading volume is less than 1% of perpetual DEX

On-chain options trading volume is still less than 1% of perpetual contract DEX, while traditional market options trading is about three times that of futures. Backtesting of Bitcoin's daily closing prices from January 2018 to October 2026 shows that the liquidation probabilities for 10x perpetual contracts over 180-day, 90-day, and 60-day windows are 47%, 29%, and 18%, respectively. On October 10, 2025, among three $1,000 Bitcoin longs, the 10x perpetual was liquidated at 21:14, and the 30-day call option dropped to a low of $181 before returning to over $800 within an hour, while a $52 seven-day put option helped the 10x longs weather the downturn. In the past, on-chain options have failed due to fragmented order books, difficult hedging, and locked-up capital. Hegic depositors lost about $80 million in May 2021, and Lyra depositors experienced a 4.9% loss in the Bitcoin pool and a 17.6% loss in the Ethereum pool over seven months. By utilizing margin from perpetual liquidity pools like Hyperliquid, the locked capital required to sell a Bitcoin call option can be reduced from about $100,000 to around $15,000, with monthly returns increasing from 1.8% to about 12%. Derive liquidated approximately $18 billion in notional options value in the year ending October 19, and after Paradex integrated with Paradigm on September 15, options trading volume surged from less than $3 million to $58.7 million within a week, while open interest fell from over $250 million to about $96 million by October 14. By September 2026, the notional value of on-chain options is expected to double to $5 billion, with premiums rising to $85 million.

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