Is Derive the Next Hyperliquid? It Dominates On-Chain Options, but It Is Still Just a Niche

Anyone who missed Hyperliquid in 2024 is looking for the next one. On 14 October 2026, Lilian Aliaga of OAK Research put forward a candidate: Derive, an exchange for crypto options. Its token DRV has risen ninefold since the start of the year, 172 percent in September alone.

The numbers behind the proposal hold up. Of every dollar of option premium paid on a blockchain, 88 cents go to Derive. Trading volume in September was the highest ever.

But options trading on blockchains is a small market. According to an analysis by Pink Brains on 13 October, Deribit, the largest options exchange, traded about 14 times as much over 30 days as all blockchain venues combined.

So before you buy DRV on the Hyperliquid story, three questions are worth asking. How big is the market Derive dominates? What does it cost to hold it? And how much of it is already in the price?

What Derive does: an options exchange that hands your money to no company

Derive is an exchange for options and, on the side, for perpetuals, futures without expiry. It lists options on bitcoin, ether, HYPE, Solana, XRP, Zcash, Dogecoin and gold. Your money does not sit in an exchange account but in a smart contract on Ethereum that you control.

The project is older than the price suggests. It launched in August 2021 as Lyra on Optimism, back then with an automated pricing pool instead of an order book. In December 2023 it moved to its own blockchain, in August 2024 it was renamed Derive, and in January 2025 the DRV token followed. Since 6 October 2026, version 3 has been running: the own blockchain is shut down, and settlement happens directly on Ethereum.

Access is restricted. The terms of use exclude US persons, Australian tax residents and residents of Ontario; in the UK only professionals and wealthy companies may trade. Otherwise Derive does not require identity checks.

Derive is an options exchange without a custodian, but not for everyone.

Which leaves the question of why it took five years.

What makes Derive special: it prices the risk of the whole account

On-chain options failed for years, and they failed on a calculation. OAK sets it out in the first part of its series: whoever sold a bitcoin call at $100,000 for a $1,800 premium had to lock up the full $100,000 on older platforms. That is 1.8 percent a month. For a market maker who lives on selling options, it does not pay.

Derive instead checks what the whole account would lose in 23 scenarios, with prices between 14 percent lower and 14 percent higher and with shifting volatility. For the same call, about $15,000 of collateral is then enough, and 1.8 becomes about 12 percent a month.

This portfolio margin has existed on Derive since February 2024. On top come an order book and requests for quote for strategies built from several options, executed in full or not at all.

Without this technology there would be no business. Against Deribit, though, it wins no customers on its own, because portfolio margin has been standard there for years.

Derive solved the problem five generations before it failed on. Deribit never had it.

How much trading does that actually attract?

Who uses Derive: few professionals, a lot of volume

DefiLlama (volume), OAK Research 14 Oct 2026 (premium share, traders), Alea Research 5 Oct 2026 (share on 1 Oct), Deribit share own calculation from the public interfaces of Deribit, OKX, Bybit and Binance, 16 Oct 2026, excluding CME.

On blockchains, Derive has hardly any competition. In the options market as a whole, it holds three percent of what stands open on the books. And the volume comes from few hands: about 1,200 active traders in the best week is the size of a trading desk, not a retail exchange. The only publicly named institutional market maker is FalconX, and it keeps its collateral off the blockchain.

Hyperliquid was different. There the users came first. Phantom, a wallet, earned about $20 million in fees through Hyperliquid's builder codes in less than a year. Derive has had the same system since February 2026. The app Dream, so far the most visible builder on it, has earned $12,446 from it, in total.

A single Hyperliquid partner earned 3.4 times what Derive took in fees in twelve months altogether.

There is still one niche where Derive leads.

Where Derive really leads: options Deribit did not offer yet

On 20 November 2025, Derive launched options on HYPE, Hyperliquid's token. Deribit only followed on 23 June 2026. At the end of July, open positions in HYPE options stood at about $198 million on Derive and about $22 million on Deribit (Anchorage Digital, 28 Jul 2026).

This is the part of the story that holds: where large exchanges do not list an asset, or list it late, Derive is the venue. It is just smaller than what OAK promises in its title. For bitcoin and ether, where more than 90 percent of the options market sits, the price is still set on Deribit. Market makers on Derive take Deribit's volatility as their reference and hedge there, as OAK itself writes.

Derive leads where Deribit is missing. Where Deribit is present, Derive is Deribit's customer.

What does it cost to keep traders on Derive anyway?

What the liquidity costs: up to twice what it brings in

OAK itself writes that the liquidity is rented. The text does not name the rent, but it can be calculated from the terms of the incentive programme. Market makers can earn up to $500,000 in USDC and 1 million DRV every 28 days. On top, the best option market makers get a negative fee: they are paid per order.

Caps from the programme terms (Derive documentation, as of 9 Oct 2026), scaled to 365 days. Derive does not disclose what was actually paid out. Fees: DefiLlama, options and perpetuals, V2 and V3.

The USDC rebates alone come close to a full year of fees. With the DRV incentives, the rent can be twice the income.

The DRV incentives for traders have been paused since the end of September, according to OAK. The first reading since then points the wrong way: open positions across all on-chain options venues, more than 90 percent of them on Derive, fell from about $2.5 billion at the end of September to $1.75 billion on 12 October (Pink Brains). Bitcoin fell over the same period too, and the two cannot be separated.

Income per trade is falling as well. Per $100 of options volume, Derive took 2.94 cents in fees in January and 1.22 cents in September. That follows from its customers: professionals trade large strategies, and the cheapest leg of a strategy is fee-free.

Hyperliquid built its liquidity itself within months. Derive has been buying it in for four years.

Who pays that rent in the end? Partly the DRV holders.

Tokenomics: the promise of a fixed supply lasted eight months

At launch in January 2025, the founding proposal said: 1 billion DRV, "no new tokens will be minted". In September 2025 the DAO voted to create 500 million new DRV, without a single vote against. 230 million of them go to the core team over four years, 270 million to the Derive Foundation, with no set purpose. Since then the maximum supply has been 1.5 billion.

Etherscan, Arbitrum explorer, DefiLlama, Alea Research 27 Sep 2026 (treasury attribution).

A good third of all DRV sits in two accounts that DefiLlama counts as the DAO treasury. Over the next twelve months, by own calculation, 63 to 76 million new DRV enter circulation, mostly from team vesting. The team tokens may only move once the market value averages more than $150 million over 30 days. On CoinGecko figures that has been the case since mid-September, that is, since the price jump.

Against that stands the buyback. Since October, half of fee income goes into buying DRV on the market. With about $4.7 million of retained revenue a year, that is roughly $2.4 million or about 6 million DRV, a tenth of what is being added. None of it is burned. The bought DRV go into the DAO treasury.

The buyback does not make DRV scarcer. It moves them from the market into the treasury.

And how has the price done so far?

The price against bitcoin: first minus 71, then plus 841 percent

Kraken daily closes DRV/USD and BTC/USD, DRV from start of trading on 15 Jan 2025.

In its first year, DRV lost almost three quarters against bitcoin. The low came on 6 April 2025 at 1.67 cents. Since the 2026 low on 24 February, the price has risen elevenfold, with the high on 10 October at 53.7 cents. On the reference date, DRV stood 23 percent below that.

A few months carried all of it. Of 20 full months, 10 ended ahead of bitcoin and 10 behind. Five months brought more than 70 percent each: June and July 2025, and March, June and September 2026. Miss one of them and you miss a large part of the gain.

Monthly return in percent, month-end close against previous month-end close; January 2025 from 15 Jan, October 2026 to 15 Oct.

Today the market values DRV at about $411 million if you take the 999.65 million DRV CoinGecko counts as circulating, and at $617 million on the full supply. That is 70 to 105 times the fees of the last twelve months.

Buying DRV today means paying for the Hyperliquid story before it has happened.

Which leaves the question of how much of what Derive announces can be checked.

What was announced and what can be checked

What a counterparty confirms holds up. The list of institutional partners for custody and wallets, by contrast, has so far appeared only on Derive's own blog.

The technology is proven; the big names, so far, only half.

What would have to change for the story to hold

• Open positions without incentives. DRV rewards for traders have been paused since the end of September. If open positions on Derive hold up over the coming months, the liquidity was more than rented. OAK names this test as its first yardstick.
• Traders who are not professionals. 1,200 active traders a week do not support a comparison with Hyperliquid. The number of apps bringing customers onto version 3 is the measure. Today they can be counted on one hand.
• The share of the whole options market, not of the blockchain. 3.1 percent of open positions on 1 October. Only when this number rises is Derive taking customers from Deribit.
• The supply of DRV. About a third sits in the treasury, the lock on team tokens has been lifted since September on CoinGecko figures, and the buyback ends up in the treasury. Any redistribution from these accounts matters more to holders than the buyback.

None of this makes Derive badly built. The protocol solved a problem five generations before it failed on, and for options on new assets like HYPE it is the first address. Whether it becomes more than an exchange for professionals with special requests will show in its open positions over the weeks without DRV rewards.

FAQ

Why do the circulating supply figures differ? CoinGecko counts 999.65 million DRV in circulation, essentially the old supply before the new tokens were created; CoinMarketCap counts 737.5 million without a published method. This piece uses CoinGecko, and the full 1.5 billion for dilution.

Is Derive cheaper or more expensive than Deribit? No robust measurement for equivalent positions over a longer period could be found. A frequently quoted figure of about a 40 percent markup goes back to an article that those quoting it do not name. It is therefore not in this text.

Why is CME missing? CME offers no free interface. With CME and options on the US ETF IBIT, Derive's share of the total market would be even smaller.

How it was measured

All values retrieved on 16 Oct 2026 between 11:40 and 19:10 UTC. Volume, fees, revenue and deposits from DefiLlama; fees over the last twelve months across options and perpetuals of V2 and V3. Exchange open interest in options from the public interfaces of Deribit, OKX, Bybit and Binance (contracts times underlying price), cross-checked with Alea Research ($44.7bn on 1 Oct) and the Backtesting Arena connector (Deribit BTC options in the ten nearest expiries ≈ $30bn on 16 Oct). Incentives from the Derive documentation, holders from Etherscan and the Arbitrum explorer, votes from Snapshot and the Derive forum. Prices from Kraken; monthly return = month-end close against previous month-end close.

All DRV monthly returns in US dollars

Kraken DRV/USD, month-end close against previous month-end close in percent; January 2025 from 15 Jan, October 2026 to 15 Oct.

Not investment advice, not a recommendation, not a forecast — historical patterns are no promise.

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