Ether option contracts listed on Deribit, the largest crypto options exchange, are more popular than ever. This is possibly due to yield farming, the act of putting crypto holdings to work on decentralized applications to earn more crypto. 

  • Options open interest, or contracts traded but not liquidated by an offsetting trade, rose to a record high of $507 million on Deribit on Tuesday, surpassing the previous record high of $438 million reached on Aug. 20, according to data source Skew.
  • "The key driver for the phenomenal growth has been the recent DeFi success," Luuk Strijers, chief commercial officer of Deribit, told CoinDesk in a Telegram chat.
  • "Many clients have been farming yield using stablecoins, which are bought by selling ether and buying ether call options (bullish bets) to keep the upside potential in the second-largest cryptocurrency," Strijers added.
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Ether options open interest on Deribit
Source: Skew
  • Open positions in ether options have surged by 45% from $349 million to $507 million over the past five days and nearly doubled since the end of July.
  • The total value locked (TVL) in the DeFi applications has surged by over 20% to $8.65 billion in the past five days. Also, TVL has more than doubled in the past four weeks, according to defipulse.com.
  • Data suggests that the yield farming frenzy has boosted the ether options open interest.
  • That said, it is also possible that some investors might have just bought calls, anticipating a strong price rally. Ether rose to two-year highs near $480 on Tuesday.
  • Other exchanges have not seen quite the same level of activity over the past two weeks. Open interest in options listed on the futures giant OKEx remains well below the record high of $43 million reached in mid-August.
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Ether options open interest on OKEx
Source: Skew
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