Compare All Derivative Cryptocurrencies
April 2024

What are derivative tokens?

Derivative tokens are tokens of decentralized exchange platforms that allow users to use more sophisticated tools such as futures, options, and perpetual contracts. Crypto derivatives are contracts or instruments that derive their value from the underlying cryptocurrency. Crypto derivatives allow traders and users to trade with bigger leverages.

The derivatives market is riskier than the spot market. When you buy a cryptocurrency on a spot market, you will make a profit when the price goes up, and you will have a loss when the price goes down. Derivatives enable traders to make a profit even when the price of underlying crypto goes down.

Decentralized exchange platforms have their native governance tokens. Most DEXes are built as a DAO, and native token holders can participate in the platform's governance by voting on important decisions. Holding governance tokens gives some benefits, such as paying fewer fees on transactions and receiving a share of the platform's revenue. Derivative exchange platforms have native tokens, and they are labelled as "derivative tokens".

Crypto futures

Crypto futures are very similar to standard future contracts used for stocks or commodities. Technically saying, crypto futures are betting on the future price of a cryptocurrency without actually owning it. When you want to trade crypto futures, you don't need to buy the cryptocurrency you want to trade. If you believe in a rise or fall in the future price, you can simply make a bet. It is more like betting. Bitcoin futures are the most traded crypto futures.

Crypto options

Crypto options are very similar to commodity and stock options too. Simply put, options are buying or selling contracts with a future date and price. When you have a buy option, you will be able to buy the underlying crypto with the price set before on a future date. When you have a sell option, it is also the same logic but in another direction. Crypto options allow users to buy or sell the specific crypto on a predetermined date without being affected by price changes.

Perpetual contracts

Perpetual contracts are similar to crypto options, but they don't have a predetermined date or expiry date. You can hold a perpetual contract as long as you are able to provide enough collateral. Active traders use perpetual contracts to hold leveraged positions. Leveraged positions offer better returns when the trader makes a winning bet, but it also contains a more significant risk of losing more capital when the trader makes a losing bet.

Most popular derivative tokens

Since the Ethereum blockchain started hosting decentralized apps in 2016, many DeFi (Decentralized finance) applications have been created. DeFi apps and protocols have been developed and improved a lot. There are very complex decentralized trading apps built on blockchain that provides traders with a variety of different products. The most popular derivative exchange platform is FTX.

FTX derivative exchange platform was founded by MIT graduates in 2018. FTT is the native token of the platform. FTX platform is completely decentralized. FTT tokens are ERC-20 tokens built on the Ethereum blockchain. FTX platform has a trading volume of more than 100 Million USD in a day.

The serum is the second biggest decentralized crypto derivatives exchange platform. The serum exchange platform is built on the Solana blockchain and its native token SRM. SRM is a natively built Sol token, but you can also find wrapped SRM tokens in ERC-20 standards. Serum platform is a leading derivative exchange with an exceeding 100 Million USD barrier.

DYDX and Synthetix are other leading crypto derivative platforms with a daily volume exceeding 100 million USD. DYDX is the native token for the DYDX platform, and SNX is for Synthetix. Synthetix stands out with the wide selection of products it offers. The best thing about Synthetix is tradable non-crypto assets. S&P and Nasdaq stocks can be traded with cryptocurrency on the Synthetix platform.