Derive Protocol Brings Onchain Options to Crypto Market
The Derive protocol is an onchain options and perpetuals platform that settles trades on its own Ethereum rollup, called Derive Chain. The token that governs it is DRV, which stakers receive in exchange for their tokens at a one-to-one ratio. The protocol used to be called Lyra, and LYRA holders were able to migrate their balances to DRV without losing any value.
Derive is a self-custodial derivatives platform that allows users to trade options, perpetuals, and spot markets with portfolio margin capabilities. This means that users can use their balance in one subaccount to back every position in another subaccount, rather than having to sell assets first. The protocol also uses cross-asset collateral, allowing users to use WETH or WBTC as margin for an options position without being sold first.
The token launch documentation shows six rounds of airdrops that took place from May 8, 2024, to January 13, 2025, distributing a total of 77.1 million DRV tokens. This was followed by the rebranding of Lyra to Derive and the migration of LYRA holders to DRV at a one-to-one ratio.
The protocol's own documentation describes three moving parts: accounts that hold cash, collateral, and open positions; risk managers who set margin requirements for each account and liquidate it when the account falls beneath that requirement; and a security module that holds reserve funds to cover bad debt when a trader goes insolvent.