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

Altcoins

DeFi

Kyber Network is an innovative, decentralized multi-chain liquidity protocol that aggregates liquidity from various exchanges to provide DeFi users with the best rates.

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(DeFi). When there’s adequate liquidity, the market is healthy, functional, user-friendly and active. As such, Kyber Network is out to provide a deeply liquid, decentralized trading space where users can quickly and easily interact with DeFi platforms and applications without an intermediary.

Its mission is to become a key liquidity hub to power the fast-growing decentralized economy of DApps, NFT markets, token swaps and other crypto components.

Find out why Kyber Network makes DeFi tick.

Founded in 2017 by Loi Luu and Victor Tran, Kyber Network managed to raise 200,000 ETH (roughly over $60 million at the time) through an ICO for its native token, KNC.

Following a successful launch on Ethereum in 2018 with Vitalik Buterin as its key advisor, the Kyber team opened up its infrastructure hoping to rope in the larger decentralized economy.

It's on the backdrop of innovation that Kyber Network developed its flagship product, KyberSwap, a multi-chain

 (AMM) that lets you execute token swaps without going through a centralized third party.

KyberSwap aims to foster better collaboration in the DeFi space, and has achieved precisely that with over 10 supporting networks — whereas the top decentralized crypto exchange, Uniswap, only supports only five networks.

Governed by KNC holders through KyberDAO, the network’s 

, Kyber Network is community-driven, with reputable projects backing its staking program.

Kyber Network operates as a multi-chain smart contract platform that uses a dynamic reserve model to provide liquidity and takers to execute trades. The platform provides a thriving ecosystem where 

 (DApps), traders and liquidity providers (LPs) can seamlessly transact and earn from countless tokens.

Using Kyber’s on-chain framework, developers can easily integrate other protocols into their applications without permission using 

. This way, applications can accept payments in their preferred cryptocurrency, even when users don’t hold the token native to the blockchain.

With Kyber, traders can instantly and securely swap tokens with no need for sign-ups, intermediaries or trading limits.

As Kyber’s flagship project, KyberSwap is strategically using its advanced features to fuel and empower various users in the DeFi ecosystem, including traders, LPs and developers.

As a DEX aggregator, KyberSwap analyzes rates across thousands of exchanges to provide its traders with the best rates. Kyber ensures high-quality, accurate price feeds on KyberSwap through its partnership with 

KyberSwap also concentrates liquidity from the industry’s leading liquidity protocols, which allows LPs to earn from their crypto assets. Its two main protocols are KyberSwap Classic Protocol and KyberSwap Elastic Protocol.

Kyber uses an innovative, developer-friendly reserve system to provide liquidity for its DeFi users. Through these unique market-making reserves, developers can deploy smart contracts that cater to diverse liquidity needs. Once a taker initiates a trade, the protocol scans the network to find the best price and uses that reserve to provide liquidity.

The three main types of Kyber Reserves that cater to the different types of LPs are: 

Designed for professional on-chain market makers (MMs), Kyber’s Fed Price Reserve (FPR) allows them to generate profits on-chain through a gas- and capital-efficient market-making mechanism.

FPR’s unique architecture lets professional MMs tailor their algorithm, customize their trading strategy and work within their desired risk exposure.

Compared to other market-making options — such as AMMs and traditional order books used by centralized exchanges — FPR is dynamic and flexible, with practical risk management tools. It also doesn't require liquidity capital lockup.

The immense benefits of the FPR model are shown below:

Kyber’s APR is designed for token teams or large token holders who want to be LPs on the network. APR provides a flexible pricing system that can be automated with a preset algorithm, or tailored to suit the current market conditions.

You’ll enjoy massive exposure to the DeFi ecosystem for your listed tokens with APR, which is already used by solid token projects such as 

. With APR’s efficient use of token inventory, you can expect better liquidity and spreads with low slippage, even for large orders.

Here are some benefits of the APR design:

While Federal Price Reserve and Automated Price Reserve work solely on Kyber, Bridge Reserves (BR) brings in liquidity from other on-chain liquidity sources, such as Uniswap, 

The key benefit of BR is to allow takers and DApps to use the Kyber protocol as a single liquidity endpoint, which saves time and costs compared to integrating multiple systems. BR liquidity pools even offer zero liquidity fees, ensuring the best average token rates — no matter what on-chain pool the liquidity is taken from. 

 governance token for Kyber Network. It not only interconnects all the stakeholders in the Kyber ecosystem, but it can also be used to transfer value beyond. KNC is a dynamic token you can upgrade, mint or burn, giving it the flexibility to better support the liquidity and growth of the network.

As a governance token, KNC is staked by holders who can also vote on KyberDAO’s governance platform to receive trading fees. KNC is also used to incentivize and provide more value to LPs, above the trading fees they receive. Additionally, KNC can be used as collateral for loans and margin trading on DeFi platforms such as 

Other use cases for KNC include facilitating crypto payments on platforms such as 

Kyber Network’s vision is to provide a solid infrastructure that caters to the liquidity needs of the entire DeFi family. With over 100 DApp integrations and over $10 billion in total trading volume, Kyber has taken a strategic position in the ever-expanding and fast-paced DeFi movement.

Since 2021, KNC’s price has been relatively stable, trading within a range of $1 to $2 for most of 2021. In February 2022, it broke a key resistance level at around $2.20, and continued on an upward price trajectory that culminated in its highest price of $5.70 at the end of April.

However, Kyber’s price dropped sharply from this all-time high the following month, and has been trading sideways since then. Expert 

predicts that KNC will remain bearish for years to come, falling to below $1 by 2027.

 don’t foresee an aggressive price growth rate for KNC, predicting the token will continue to trade sideways for most of 2023 and may reach around $3 in 2024. The platform is bullish on KNC for the long term and believes it could hit $20 by 2030. DigitalCoinPrice also foresees similarly modest growth for Kyber to 

That said, it’s important you research any token before investing in it, since the crypto market is highly volatile and unpredictable.

You can buy KNC on leading cryptocurrency exchanges, such as Bybit, which offers 

and go to the derivatives page to trade KNC.

Liquidity is instrumental to the growth of DeFi, and Kyber Network is innovatively leading the way toward becoming a trust-minimized liquidity hub. Its unique Kyber reserve models and protocol design places it as a strategic liquidity infrastructure provider for a decentralized economy.

As the DeFi landscape continues to evolve, Kyber is constantly building to integrate more DApps and add more assets for a seamless token-swapping experience.

What Is Kyber Network (KNC): Connecting Liquidity Across Chains

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards