When I wrote about Derive in March, the core thesis was that the protocol was better positioned than at any point in its history: options volumes were reaching new highs, RFQ activity was breaking out, BTC options share vs. Deribit was improving, and HYPE was emerging as proof that Derive could move faster than incumbents on new asset coverage. The open question was whether that momentum would translate into more durable revenue growth. Last week, Derive generated an all-time high of $110K in weekly revenue, net of maker rebates, across options and perps. Options remained the most profitable part of the protocol, reaching an all-time high of $62.5K in weekly revenue while maintaining gross margins above 90%. This continues to support the view that options are Derive’s higher-margin product, even as perps become increasingly important to the broader exchange. Perps also had their strongest week on record, generating $47.7K in revenue net of rebates, with gross margin improving to 65% from below 50% in recent weeks. Some of that was helped by downside volatility, with the past three weeks contributing roughly $35K in liquidation fees. The volume side tells a similar story. Derive recorded $702M in notional volume last week, its second-highest weekly total over the past year. But the important difference is composition. In March, volume was heavily BTC-led, with BTC accounting for more than 70% of total options and perps volume. Last week, BTC accounted for 46%, followed by ETH at 29% and HYPE at 26%. HYPE has now become Derive’s most important market after BTC, surpassing ETH in monthly volume in March and accounting for more than 2x ETH volume in May. That said, ETH also saw a notable resurgence last week, breaking $200M in weekly volume for the first time in well over a year. The relative valuation setup has also improved. Despite DRV trading near all-time highs, its 30-day annualized P/S multiple has compressed from above 50x in early March to roughly 25x today. In other words, revenue has accelerated faster than market cap. There have also been token-level improvements. DRV was listed on Coinbase two weeks ago, improving the asset’s liquidity profile. Derive also completed its B1 token transparency filing in May, further improving disclosure around the token, which remains the only way to gain upside to the protocol’s growth. Finally, Derive’s late-April governance proposal flipped DRV’s net structural flows from negative to positive. The proposal increased the share of protocol fees used for buybacks from 25% to 35%, while reducing staking emissions from 250K DRV to 100K DRV per week. At current prices, buybacks exceed emissions by roughly $70K per month, more than fully absorbing emission-driven sell pressure. The case for onchain options remains clear. As crypto markets mature, demand for more sophisticated hedging and structured positioning should continue to grow, and Derive is increasingly leading that charge.

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