# Introducing EverLasting Options ### What are Everlasting Options? Everlasting Options are perpetual-style options that do not expire. Unlike traditional options, which expire at a fixed time and require traders to continuously roll positions forward, Everlasting Options remain open indefinitely as long as the position holder continues paying the funding fee required to maintain the position. In essence, Everlasting Options combine characteristics of both traditional options and perpetual derivatives: * Similar to traditional options, they provide non-linear payoff exposure * Similar to perpetual futures, they do not expire and rely on a funding mechanism to maintain price equilibrium over time This design removes the need for expiry management while allowing traders to maintain long-term optionality exposure. Everlasting Options can be viewed as a perpetualized version of traditional options, designed specifically for continuous on-chain trading. ### What Are the Problems with Traditional Options Traditional options are difficult to implement efficiently on-chain for several reasons: * Each expiry date fragments liquidity into separate markets * Market makers must continuously manage inventories across strikes and expiries * Users often need to roll positions manually after expiration * Liquidity becomes inefficient for long-tail expiries In traditional finance, these problems are partially mitigated by centralized market makers and institutional infrastructure. In DeFi, however, fragmented liquidity and limited market-making efficiency become major obstacles. Everlasting Options were introduced to address these issues by creating a perpetual options market with unified liquidity and continuous trading. ### Why Everlasting Options Matter By removing expirations and reducing liquidity fragmentation, Everlasting Options simplify on-chain options trading while improving capital efficiency and market continuity. This allows traders to maintain long-term optionality exposure without actively managing contract rollovers. ### How Everlasting Options Work Everlasting Options are part of Deri’s family of funding-fee-based perpetual derivatives. Just like perpetual futures maintain their perpetual nature through funding fees, Everlasting Options also rely on a funding mechanism between longs and shorts. The funding mechanism is generally derived from the difference between the option’s market price and its intrinsic value: $$ Funding≈Mark−IntrinsicValue $$ where: * $Mark$ represents the current market price of the option * $IntrinsicValue$ represents the option’s intrinsic value based on the underlying asset price Under normal market conditions, long positions will generally pay funding fees to short positions in order to maintain exposure over time. This mechanism allows the option contract to exist perpetually without requiring expiration or settlement cycles. ### Understanding the Payoff The payoff structure of Everlasting Options is similar to traditional options. For example: * A long call option benefits when the underlying price rises above the strike price * A long put option benefits when the underlying price falls below the strike price However, unlike traditional options: * There is no expiration date * There is no need to roll positions * Traders can maintain exposure continuously through the funding mechanism This creates a more capital-efficient and user-friendly options trading experience for on-chain markets. ### Funding Fees in Everlasting Options Funding fees are a core component of Everlasting Options. Unlike perpetual futures, where funding fees may fluctuate between positive and negative depending on market conditions, Everlasting Options are generally designed such that long positions pay funding fees to short positions. In real trading conditions, however, market dynamics may temporarily push funding fees below zero. The funding mechanism serves several purposes: * Maintains the perpetual structure * Helps keep option pricing aligned with market demand and theoretical value * Incentivizes balanced market participation between longs and shorts ### Capital Efficiency One of the key advantages of Everlasting Options is capital efficiency. Traditional DeFi options protocols often suffer from: * fragmented liquidity * low utilization * limited leverage * inefficient collateral usage Deri’s implementation allows Everlasting Options to operate inside the unified DPMM (Deri Proactive Market Maker) framework, enabling more efficient liquidity utilization and smoother pricing. This significantly improves the trading experience compared with many traditional on-chain option models. ### Comparison with Traditional Options | Feature | Traditional Options | Everlasting Options | | -------------------- | -------------------------- | ------------------- | | Expiration Date | Fixed | None | | Liquidity | Fragmented across expiries | Unified | | Position Rolling | Required | Not required | | Funding Fee | No | Yes | | Settlement Mechanism | Expiration-based | Funding-based | | Exposure Duration | Limited | Perpetual | ### Typical Use Cases Everlasting Options can be used for: * Directional trading with asymmetric payoff * Gaining exposure to market volatility * Hedging spot or LP positions * Maintaining long-term optionality exposure without rolling contracts Because they are perpetual, Everlasting Options are particularly suitable for traders who want continuous options exposure without actively managing expiries. ### Everlasting Options on Deri Deri Protocol implements Everlasting Options using its unified DPMM framework, allowing traders to access perpetual options markets directly on-chain. Combined with cross-chain deployment, transparent on-chain execution, and capital-efficient liquidity mechanisms, Everlasting Options provide a perpetual options trading model designed for decentralized markets. For more technical details, please refer to the Everlasting Options Whitepaper. {% embed url="" %} --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.deri.io/library/academy/everlasting-options/introducing-everlasting-options.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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