Castle Labs research highlights the resurgence of onchain options via CLOBs, RFQs, and prediction markets amid growing institutional derivatives demand.
DeFi & Yields ·
Castle Labs has published research mapping the resurgence of onchain options, identifying central limit order books (CLOBs), request-for-quote systems (RFQs), and prediction markets as key infrastructure driving renewed activity in crypto derivatives. The analysis frames this wave as part of a broader institutional shift toward digital asset derivatives, which have grown to dominate trading volumes relative to spot markets.
The mechanisms underpinning this resurgence differ from legacy centralized exchange models. CLOBs enable peer-to-peer order matching onchain, while RFQ systems allow customized quote negotiation for larger trades. Prediction markets add a distinct layer by pricing outcomes of future events, creating another avenue for derivatives-style exposure without traditional futures contracts. Castle Labs' research emphasizes how these mechanisms are attracting institutional capital seeking to deploy capital in structured derivative positions.
The extent to which these onchain venues will capture meaningful institutional flow, and how regulators will treat these models as they scale, remain unresolved questions. The research does not specify projected adoption timelines, market share shifts from incumbent centralized platforms, or regulatory clarity on key jurisdictions.