Onchain Options Volumes Hit All-Time Highs as Lending Yields Dry Up

As decentralized finance (DeFi) matures, users are turning to alternative platforms, such as onchain options, to generate higher yields.

Onchain options activity reached all-time highs over the last two weeks, with $44 million of volume in the first week of February and $28 million during the last week of January.

Onchain Options Volumes - DeFiLlama

More than 80% of the total onchain options volumes are concentrated in leading protocols, Ithaca and Derive. Over the last week, Ithaca processed $26 million in volume and Derive recorded $11 million, while the third-busiest protocol, Overtime, recorded just $2 million.

While the exact catalyst for the growth isn’t clear, it could be a combination of traditional lending platforms like Aave offering lower yields than in prior years, and also potentially some anticipation of Hyperliquid’s upcoming HIP-4 markets, which will allow users to trade binary outcomes that function similarly to options.

Just yesterday, a popular DeFi trader known as Route 2 Fi posted on X, “Where are people getting yield these days? 2% APR on USDT at Aave isn't exactly sexy.” The post gained significant traction online, indicating that many DeFi participants are also seeking new, lucrative yield sources.