PERPS WILL EAT OPTIONS

Summary from the TLDR Crypto newsletter

On-chain options hold under 1% of perp DEX volume despite representing 3x futures volume in TradFi. The gap persists partly because 10x perp positions carry a 47% liquidation probability over 180 days, making options the structurally superior instrument for multi-week theses. The growth mechanism is reflexive: options sellers hedge on perp markets, expanding perp OI rather than cannibalizing it, a dynamic Deribit already demonstrates with $2B+ in futures OI sourced from options hedging. September posted the best on-chain options month on record at ~$5B notional (7% of Deribit volume), with Derive commanding 90%+ of on-chain premium at $18B notional traded and DRV up 1,000%+ YTD at 66x annualized revenue. On-chain options are projected to grow from 0.8% to 5% of perp volume. Hyperliquid via Hypercall's shared margin, Derive, and Paradex will be the primary beneficiaries.