Onchain as a Competitive Edge

Options dominate derivatives markets in traditional finance, but in crypto, they’ve lagged far behind. Meanwhile, perpetual futures (perps) have already made the leap onchain, proving that speed, liquidity, and transparency can coexist in a self-custodial model.

The next frontier is clear: bringing options onchain at scale. This case study explores why that shift is inevitable, what challenges need to be solved, and how Kyan is building the infrastructure to make it happen.

Before you scroll down, sign up on kyan.blue to stay up-to-date with Kyan’s development and the upcoming beta event.

The Problem: Options Lag Behind in Crypto

In traditional finance, options are the cornerstone of derivatives markets. They regularly outpace futures in trading volume, offering flexibility for hedging, speculation, and structured strategies.

Source: Traders Magazine

Yet in crypto, options have remained underdeveloped. Most trading activity has concentrated on perpetual futures.

Sources: Coingecko, Deribit Insights

Options have struggled with fragmented liquidity, clunky execution, and infrastructure that couldn’t deliver the speed or depth that active traders demand. For institutions, the gap between what’s available in TradFi and what exists onchain has been too wide.

Onchain Perps Have Already Broken Through

The breakthrough came with perps. When centralized exchanges introduced them, they became the most popular crypto derivative overnight. The next step was proving that they could thrive onchain.

Source: Hyperliquid stats

Hyperliquid has already demonstrated this. By combining deep liquidity, fast execution, and transparent settlement, it set the standard for what onchain perps trading can be. Traders no longer had to compromise between self-custody and performance.

The demand for onchain options is clear, and the only reason they haven't worked yet is that there has been no efficient implementation.

Transparency, Custody, and Composability

Onchain options solve real, persistent pain points in the market:

• Transparency: All deposits and withdrawals visible onchain.

• Self-Custody: Traders control their assets directly, no centralized counterparty risk.

• Composability: Options can integrate seamlessly with vaults, structured products, and broader DeFi infrastructure.

• Emergency Withdrawal: On Kyan, if the protocol becomes inactive (no equity updates for 30 days), users can withdraw directly from the smart contract based on the last published equity values.

But unlocking this opportunity requires solving three key challenges: liquidity, latency, and execution flexibility.

How Kyan Delivers Onchain Options

Kyan is purpose-built to bring professional-grade options trading onchain, eliminating the tradeoffs that have held back the market until now.

Liquidity from Day One

Kyan launches with committed market makers for both perps and options, ensuring deep orderbooks and tighter spreads. Traders can execute strategies with confidence, from single-leg positions to multi-leg spreads.

High-Performance Infrastructure

Low latency is no longer exclusive to centralized venues. Kyan’s infrastructure delivers instant execution, making onchain trading feel seamless and competitive with the best CEXs.

RFQ for Large Trades

Institutions often need to move in size. Kyan’s RFQ system supports block trades starting from $200K, giving whales and advanced traders direct access to liquidity without draining the market. Kyan’s architecture is designed to support massive trades, whether it be for options, perpetual futures, or combo trades.

Portfolio Margin

Kyan calculates margin at the portfolio level. Offsetting positions lower requirements, improving capital efficiency while maintaining system safety. Accounts and asset-based risk separation give traders even more control.

Learn how portfolio margin works on Kyan here.

Combo Trades

With support for up to 6 options and 1 perp in a single transaction, Kyan enables advanced multi-leg strategies at lower cost and with reduced execution risk. This unlocks the full flexibility of options trading in a way no other DeFi platform has achieved.

More about multi-leg strategies on Kyan in this article.

Bridging TradFi Sophistication with Onchain Innovation

Kyan bridges the gap between what institutional traders expect in TradFi and what DeFi can now deliver. It combines deep liquidity, fast execution, and transparency in a fully self-custodial model.

The result is an onchain options exchange that doesn’t just compete with centralized platforms but offers unique advantages: transparent risk management, composable strategies, and block trade execution without intermediaries.

The Future of Derivatives Is Onchain

Just as perps found their breakthrough moment, options are at the cusp of their own. Transparency and self-custody are no longer nice-to-haves. They’re required.

Kyan is leading this evolution. With institutional-grade infrastructure, liquidity, and risk management, it makes onchain options not just possible, but powerful.

The question is no longer if options will move onchain. It’s who will lead the way. With Kyan, that future has already begun.

What Does Kyan Mean for Crypto Options?

Make sure you’re first in line for Kyan’s beta events and updates by singing up here.

​Kyan will be a significant upgrade for anyone trading decentralized derivatives.

If you have any questions, hop into our Discord or shoot us a message on X. We would love to know your thoughts!

Kyan | Academy | Twitter | Discord | Blog | YouTube |