The problem

Movement is the trade

Many short-term positions are bets on movement: ahead of an inflation print, a rate decision, earnings or a token unlock. The trader expects the price to move a lot, or very little, and has no reason to prefer up or down.

Options

A straddle, a call and a put at the same strike, pays on a move in either direction. The buyer pays the implied volatility priced into the premium, which in crypto has tended to exceed the volatility later realized^[1], and the position loses value as time passes. It is two legs with Greeks to manage.

Crypto options are also concentrated. In 2025 options were about 2% of derivatives volume on centralized exchanges, against about 75% for perpetual futures^[2], and roughly 85% of Deribit's volume is institutional^[3].

Perpetual futures

Perpetuals are directional by construction. A position that profits from movement in either direction has to be built from several legs and rebalanced as the price moves, paying fees and slippage on each adjustment and carrying funding while it is open.

Volatility indices

Existing volatility products, such as futures on implied-volatility indices, track what the options market expects volatility to be. They do not pay the move that actually happened.

What is missing

An instrument that pays the realized size of a move, in one position, with a settlement rule anyone can check. The whitepaper calls the combined cost of the current routes the volatility tax.

Sources

1. Almeida et al., arXiv:2410.15195, 2024; Glassnode, May 2026.
2. The Block, centralized-exchange derivatives volume, January to September 2025.
3. Deribit CEO, interview, October 2025.