Lurker in @derivexyz discord - maybe sometimes writes solidity
Joined August 2020
- Tweets222
- Following329
- Followers518
- Likes382
domrom.eth retweeted
yea i’ve been deep diving into the Hyperliquid of Options lately && the more i look at @DeriveXYZ V3, the more the architecture makes sense
V2 gave Derive its own chain. that solved a specific problem: sophisticated derivatives require far more computation than you want to push through Ethereum blockspace
but V3 takes the idea one layer deeper. the exchange logic can execute inside a zkVM
matching, risk, margin, state transitions. the heavy computation happens in an environment built for it
then instead of asking Ethereum to reproduce all that computation, Derive can prove that it was executed correctly
Ethereum verifies the proof. that creates a clean separation
execution → Derive’s environment
computation → zkVM
verification → Ethereum
settlement → Ethereum
and that changes the role of the base layer
Ethereum doesn’t need to be the fastest place to run every piece of exchange logic. it needs to be the place where the resulting state can be credibly verified and settled
that’s the architectural bet i find interesting about V3. V2 specialized the chain
V3 proposes to specialize execution itself, while bringing verification and settlement back toward Ethereum
the exchange becomes computationally specialized without making its own chain the final source of settlement
that’s a much bigger shift than simply shipping another version of the exchange
the interesting thing about portfolio margin is that it changes the unit of risk. most basic margin systems look at positions individually
but sophisticated derivatives traders rarely think in isolated positions. take for example you might be long ETH spot, short a call, long a put, and running a perp hedge at the same time
the risk lives in the relationship between those positions. Derive’s Portfolio Margin Risk Manager is designed around that idea
instead of simply asking how much margin each position requires, it stress-tests the portfolio across different spot and implied-volatility scenarios and identifies the maximum modeled loss. that becomes the core of the margin requirement
so a hedge that reduces the portfolio’s actual downside can reduce the capital required to carry it. that being said, a spread whose loss is structurally capped can be margined around that capped risk rather than treating every leg as an independent liability. this is where capital efficiency starts becoming an engineering problem
better risk modelling
→ better netting
→ less idle collateral
→ more deployable capital
→ more complex strategies become viable
and that has a second-order effect
when traders can express more sophisticated strategies without unnecessarily tying up capital, the venue can support a much broader set of financial activity. major reason i keep coming back to Derive’s risk engine
the orderbook determines how trades happen. the risk engine determines how much complexity the market can support
I think the count is 4 winners to 0 losers in trade ideas now?
$ETH is catching a narrative bid:
- RH chain yet another example of big corporates using Ethereum as the base layer. Personally think this is the most bullish long term - credible neutrality is a major + for anyone building a business
- Lean Ethereum roadmap renewed focus
- Likeliest major to solve quantum resistance
+ outperforming BTC over last 7 days + on the cool inflation reading
August 28 board still has put skew over call skew (i.e. puts at a premium):
- $1600 strike puts (17 delta) are trading at 53.5% IV / $35
- $2200 strike calls (20 delta) are trading at 47.5% IV / $31
NFA but I quite like buying the calls, selling the puts (1600/2200 risk reversal) and getting paid $4 to do so each time.
Do this 1,000x, if:
- ETH stays between $1600-$2200 on Aug 28, collect $4,000 in premiums
- ETH goes to $2500, profit $304,000
- ETH goes to $1,300, lose $296,000
All depends on your outlook / risk tolerance, but I like the setup. Again, NFA.
2
10
531
domrom.eth retweeted
Jamie Coutts on @DeriveXYZ onchain options: Derive may have "cracked the code" with a CLOB engine, ex-Susquehanna traders, and 70% of all onchain options volume. Starting to eat Deribit's lunch. Still tiny. 👀
$DRV #OnchainOptions #DeFiGems
domrom.eth retweeted
Free alpha for $HYPE borrowers, holders, and yield enjoyooors.
If you're borrowing against $HYPE or want levered exposure, the borrow rate on @DeriveXYZ is 2.73% vs the 7.8% on @hyperlendx right now, with about $10m capacity before they move up to match. Usually see it as an options protocol but it's sneakily the cheapest place to borrow against $HYPE right now, by far.
At 50% LTV, you can comfily 1.5x leverage your $HYPE and sell some covered calls against it for extra yield and to hedge some downside.
With about $10k you could:
1. Buy 330 $HYPE
2. Deposit into @DeriveXYZ, borrow USDC @ 2.73% interest. Bridge to arbitrum, buy more $HYPE, repeat until you have 500 $HYPE.
3. Submit an RFQ for covered calls. Here is $35 strike price for March 27 at $1.46, but you can do whatever fits your views.
4. Sell 500 $35 $HYPE calls for $730. Your cost to borrow by then will be $10. $720 profit in 23 days. ~114% annualized yield on the initial $10k.
For reference, your yield from a similar trade ($34.5 strike) on @ryskfinance would only be about $500, so @DeriveXYZ is about 50% higher premium
Obviously selling options isn't risk free yield, but there's no better risk adjusted source of yield in the market right now.
domrom.eth retweeted
Last week we've had the honor to invite Hasu ( @hasufl ) into our podcast!
Crypto OG: walks through his poker to crypto journey, why MEV is really “ordering power” (from swaps to Taylor Swift tickets), how MEV protection has evolved, and what better market structure means for options and DeFi treasuries.
Hosted by @SeanNotShorn and @CptRandlelwa
Also available on Spotify and Apple. See links in comments
domrom.eth retweeted
Deribit. NYSE. Derive.
Top 3 for crypto options.
But only one’s not centralised.
Only one’s composable.
Only one’s onchain.
bankless.com/read/your-optio…
domrom.eth retweeted
Since January 2024, Derive has grown from $107M to $3.7B in monthly trade volume
And it’s doing it on a Conduit rollup, built with @Optimism OP Stack & @celestia underneath
Here’s how we helped @derivexyz launch a chain for its DEX, supercharge throughput, and cut DA costs 95%
domrom.eth retweeted
Big spike in Transactions on @derivexyz reaching a new ATH!
Up over 10% in 24 hours
domrom.eth retweeted
gm, get on @derivexyz today to explore and enjoy (onchain) options, I recommend it
domrom.eth retweeted
.@modenetwork and @derivexyz climbing the mgas/s leaderboards
Driven by AI Agents in the former, and onchain options finding demand in the latter
Hats off to both teams for staying heads down building
domrom.eth retweeted
DeFi was built to gather energy for atomic initiatives like this. 🪔
Add my $50 to the payout for the koalas @domrom__ ❤️🔥🤝🐨
Just checked @DefiLlama —casually 50% of the day's options volume for @derivexyz this afternoon, on a down day. 🤷🏆
Looks like it'll be another Fifty Days of Dominance before the Twelve Days of Christmas,
And it's the only place where you can buy and sell Christmas Trees on your #Bitcoin stake this season! 💪🎄 @Lombard_Finance
My investment climbs the ladder to $100 if we're there by 🧙♀️⁴
On the 50th Day, let's provide a storm of liquidity to boost the bamboo yield for these babies.
🌧🌧🌧🎍🐨
The OG forecast is Big Volume on the $50 Koala Call! 🌐❤️🔥
@EthBoi_ @0xAlvaroHK @chayensan @dillonlin_ @alexziton @codyad_am @ksett13 @earthtojake_ @TelonicID @dappbeast @muir_eth @DeriveQuant @genesisvol @0xgunboats @jumpngdog @0xVac @Miracle_ETH @degeneratoor @DeFiDerivatives @mastermojo83 @kubesqrt @kriskolton @llamaonthebrink @KevinIzzRite @d2_trading
Day 5: $5. We keep on keeping on.
Each day @derivexyz is #1 in options on @DefiLlama, $1 goes to the Great Koala National Park (koalapark.org.au/support).
domrom.eth retweeted
Welcome to the DeFi Renaissance.
Amidst the remnants of past cycles, a new era unfolds; focused on building applications that users want. Derive, founded in the 2021 cycle is leading this revival.
For the first time on any CEX or DEX, traders can deposit interest-bearing assets as collateral: weETH, rswETH, rsETH, LBTC, sUSDe, and sDAI. We are dismantling the status quo where assets sit idle, putting your holdings to work.
Why is interest-bearing collateral a game-changer?
Unlocking collateral empowers traders. Earning passive yield on your collateral is bigger.
By holding interest-bearing assets, users earn rewards while borrowing against them to trade options and perpetuals, maximizing capital efficiency. With cross-asset collateral traders can execute any strategy on their restaked tokens, including basis trades and covered calls. This unlocks payoffs and yield previously unavailable.
Our vision is to create a fluid, efficient market where your assets actively participate in your trading strategy. Embracing these collaterals breaks through liquidity barriers and opens new avenues for profit and risk management.
A special thanks to the modern-day innovators of DeFi: @MikeSilagadze, @KoppKnows, @daniel_swell_, @GAmitej, @galacticminter, @JacobPPhillips, @leptokurtic_ and @RuneKek.
And their works of art: @ether_fi, @swellnetworkio, @KelpDAO, @Lombard_Finance, @ethena and @SkyEcosystem.
Join us in realizing their vision. 🐎 derive.xyz
domrom.eth retweeted
Lyra rebranded as @derivexyz => blog.derive.xyz/derive/
Here is a thread to explain what I learnt using this DEX and why I think it has the best feature of all derivative DEXs: the Portfolio Margin 👇