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

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Artificial Intelligence (AI)

NeuralAI (NEURAL) revolutionizes 3D model creation with generative AI, addressing the high demand for visually rich graphics in the booming gaming industry.

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The current explosive growth in gaming solutions, both on blockchain and on traditional Web 2.0 platforms, might run into one particular challenge — the ability of creators and studios to generate 3D animations and graphics reliably, cost-effectively and on-scale. Ever-growing demands for visually rich graphics are driving game developers to produce increasingly complex 3D animations. According to some estimates, 

 will reach $25 billion in 2024, and by 2028 it's expected to reach around $39 billion.

Given the large size of the 3D animation market and its strong projected growth rates, the issue of generating 3D models and animations for games is paramount. Yet, the current prevalent technologies used to create 3D assets are complex, expensive and incredibly resource-hungry.

NeuralAI’s blockchain-based platform addresses these challenges by providing a flexible and affordable 3D graphics generation engine based on 

 technology. The project also facilitates decentralized trade in 3D gaming assets and GPU capacity renting. Using NeuralAI, creators can produce final 3D models using text-to-3D graphics and image-to-3D graphics solutions, reducing the costs and complexity of 3D asset creation.

 (DApp) that facilitates the creation of 3D digital assets with both text-to-3D and image-to-3D graphics using a generative AI engine.

 In addition to AI-based digital content creation, the platform also features a decentralized marketplace for 3D assets, a GPU capacity rental service, the ability to mine TAO (the native cryptocurrency of the AI-focused 

 blockchain) for GPU rentals and an incubation environment for promising gaming projects.

Generally, the technical and marketing resources required to create and monetize 3D gaming assets are substantial. 3D artists and studios often face problems such as the high cost of asset creation and the difficulty of promoting and monetizing their creations. NeuralAI provides AI-based services in order to address these concerns. Its 3D generative AI engine significantly reduces the cost and complexity of the asset creation process. In turn, its 3D assets marketplace allows creators to offer their digital creations to a broad audience of users involved in the gaming industry.

In partnership with Akash Network (AKT), NeuralAI also facilitates the decentralized rental of GPU computing power. In this capacity, NeuralAI acts as a type of

 (DePIN). Participants in the GPU capacity trade can also mine Bittensor's TAO coins, thanks to preconfigured TAO mining templates offered by NeuralAI.

The NeuralAI platform is the brainchild of two young technology entrepreneurs, Matthew Galea and Kurt Abela. They founded their startup, Neural Solutions, in Malta in 2020. After teaming up with another Maltese company, Born Digital, the project co-founders focused their efforts on AI and data solutions, eventually releasing the platform's 3D asset generation engine in May 2024.

At the core of the NeuralAI platform is its generative AI-based 3D asset creation engine, which supports both textual and image prompts provided by users to generate final 3D models. In order to convert initial 2D images into high-quality 3D outputs, NeuralAI uses a type of AI template called a 

 (LRM). LRM algorithms are designed specifically for the purpose of transforming initial 2D images into complex 3D models. NeuralAI has developed its own custom solution based on LRM technology. It allows creators to generate high-precision 3D models of geometrical structures and textures.

The platform's 3D assets marketplace allows creators to expand their outputs beyond their immediate working environments. Its marketplace supports tokenizing 3D assets into 

 (NFTs) to facilitate trade and protect intellectual property (IP).

NeuralAI Flywheel is the project team’s term for an integrated process that starts with developers providing their textual prompts for 3D model creation and ends with them receiving final outputs, with the entire functionality supported by TAO miners. The NeuralAI Flywheel process is underpinned by users who purchase and hold NEURAL 

 — the platform's native cryptocurrency. The process involves TAO miners who operate on NeuralAI's Bittensor subnet, which we’ll touch upon in the next section.

This is how the NeuralAI Flywheel process is envisioned to work, step-by-step:

The Flywheel process and many other core services envisioned by the project's team depend upon the NeuralAI Bittensor subnet, which is a work in progress as of late July 2024. Bittensor is a machine learning–focused 

 blockchain that allows providers of computational resources to process ML and AI tasks in exchange for rewards in TAO tokens. Bittensor hosts a wide variety of subnets — smaller networks within the wider platform designed for specific solutions and use cases.

NeuralAI’s own Bittensor subnet to manage 3D generation tasks is in development, and is 

NeuralAI’s generative AI-powered 3D asset creation engine supports the core offering of the platform. The 3D outputs generated by the engine can be exported in formats commonly used in the 3D animation industry — OBJ, FBX and STL. These outputs can be integrated into popular game development engines — Unity and Unreal — as well as rendering and design software packages such as Blender.

There are four main benefits for game developers and artists who use NeuralAI’s asset generation engine, as follows: 

The NeuralAI marketplace for 3D assets supports what’s referred to as “3D-fication,” whereby creators can easily transform their designs into 3D format. Converted outputs can be tokenized by using NFTs to enable their storage and transfers via blockchain. Thanks to this process of tokenization, 3D assets enjoy the security benefits offered by blockchain technology, particularly immutability and IP protection.

NeuralAI charges a 5% transaction fee on sales via its marketplace. Half of the revenues collected from charging this fee go to holders of the NEURAL token, while the other 50% is reinvested in the platform to support its growth and development.

In collaboration with Akash Network, NeuralAI offers GPU capacity renting through TAO miner templates that allow miners to monetize their participation in the capacity provision process by earning revenue in TAO coins. The miners play a significant role in the NeuralAI platform by facilitating resource-heavy computations. These computations can involve ML and AI algorithm processing, as well as graphics rendering jobs, which support advanced animation and motion graphics solutions in areas like augmented reality (AR) and virtual reality (VR).

By utilizing the resources provided by the TAO miners, platform users can process a broader range of computational tasks than would be possible using their own hardware. In turn, mining TAO can be an excellent way for capacity providers to monetize their idle hardware resources.

Another exciting work in progress on the NeuralAI platform is GPU streaming, which leverages cloud computing technology to shift the bulk of heavy computations to powerful cloud-based servers. It channels the power of high-end GPUs into users' local devices. As such, it allows heavy computations to be performed without expensive hardware upgrades.

NeuralAI's GPU streaming has particular benefits for the gaming industry and gamers. This technology allows gamers to enjoy improved graphics and a smoother overall user experience on their local devices without owning powerful machines. As such, it can create opportunities for billions of individuals with older or lower-spec computers to enjoy games that generally require high-end hardware specifications.

Within the area of GPU streaming, the NeuralAI team is conducting serious research and development: they’re exploring ways to deliver optimal data compression and minimize latency, activities that have enormous potential for industry-wide impact in areas like gaming, animation and video editing, among others.

NeuralAI’s native cryptocurrency, NEURAL, is an 

 (ETH) blockchain. NEURAL a supply-capped asset, with a maximum and total supply of 10 billion.

The token has a wide-ranging set of roles within the NeuralAI ecosystem. Key functions include:

 platform, which allows you to trade a wide range of cryptocurrencies directly on-chain in a decentralized way. Bybit Web3 DEX Pro is integrated with i-SMART technology that features components such as Influential Trader Tracking and the Real-Time Trending Indicator, giving users a competitive edge through advanced data analytics and real-time insights.

Some core services offered by NeuralAI are already live, while others are still in the development stage. By the end of the year, we’ll likely see further product launches and innovations from the project’s team. The platform is already making a valuable contribution to the industry by addressing the needs of creators in critical areas — 3D asset generation and trade.

The burgeoning $25 billion market for 3D animation needs one thing to take it to the next level — tools to generate high-quality 3D assets quickly and affordably. NeuralAI is stepping up to address this need, a challenging but potentially highly rewarding endeavor.

NeuralAI (NEURAL): Revolutionizing 3D Model Creation With Generative AI

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards