On-chain options trading volume hits an all-time high, with low lending yields possibly being the main driver

The on-chain options market has seen a historic surge in trading volume over the past two weeks, recording $44 million in the first week of February and $28 million in the last week of January. Currently, over 80% of the trading volume is concentrated in the two major protocols, Ithaca and Derive, which processed $26 million and $11 million in transaction volume last week, respectively, while the third place, Overtime, only recorded $2 million.

There is no consensus in the market regarding the reasons for the surge in trading volume. Possible factors include the annualized yield on USDT lending on Aave dropping to about 2%, reducing its attractiveness; and market expectations for the upcoming launch of the HIP-4 market on Hyperliquid. Notable DeFi trader Route 2 Fi recently posted on the X platform, stating that the 2% annualized yield on USDT on Aave has lost its appeal, sparking widespread discussion in the community and reflecting that some users are actively seeking alternative investment channels for higher returns.