Deconstructing Fufuture: "End Date Options" Perpetualization, Unlocking the On-Chain Derivatives Fantasia of Long-Tail Assets?

Written by: Web3 Farmer Frank

In the past five years, from dYdX to GMX and now to Hyperliquid, the high-leverage narrative of on-chain derivatives has always revolved around "contracts" as the main thread.

Among various protocols, some have attempted to balance higher leverage, greater decentralization, and better trading depth from the perspective of being "CEX alternatives," successfully dominating the on-chain trading structure. In contrast, the trading volume of options products in the TradFi market has long been several times that of futures, yet on-chain, it has fallen into a state of stagnation.

In fact, in the field of on-chain derivatives, the "non-linear returns" characteristic of options (limited losses for buyers and unlimited gains) is an ideal product form that naturally adapts to the high volatility environment of crypto—not only avoiding liquidation/clearing risks but also achieving a better risk-reward ratio through "time value leverage" under controllable costs.

For this reason, options have always been seen as the most promising on-chain path to break the CEX derivatives monopoly. However, ideals are often full, while reality is stark. Over the past few years, although Hegic, Opyn, and Lyra have each had their highlights and played pioneering roles in the on-chain options narrative, they have all been constrained by structural dilemmas and failed to build a scalable user ecosystem:

• On one hand, options products themselves are highly complex, from pricing models to strategy construction and exercise rules, resulting in user education costs and trading participation thresholds far exceeding those of contract futures;
• On the other hand, on-chain infrastructure still struggles to address real bottlenecks such as fragmented liquidity, low capital utilization, and high trading costs, leading to poor actual product experiences and severe user attrition;

Thus, on-chain options products generally find it difficult to form sufficient user retention and market flywheels, almost reaching a dead end. How to use low participation thresholds and flexible trading structures to position options as a better-adapted tool for on-chain derivatives has gradually become a new exploration path.

This is precisely the problem that Fufuture aims to solve. As a decentralized perpetual options protocol, Fufuture does not simply replicate traditional options "on-chain," but rather through a dual structure of "coin-based + perpetual (end-day) options," ensures the non-linear return attributes while discarding complex exercise mechanisms and time limits, thereby constructing a lighter and more sustainable on-chain derivatives interaction paradigm.

In short, in Fufuture's design, the options structure itself is not the goal but a tool to activate a new paradigm of on-chain derivatives. It reconstructs the cost structure and holding logic of traditional options through a "dynamic premium payment + unlimited extension" mechanism, making it no longer limited to "elite strategies" or "mainstream assets," but widely applicable to long-tail assets, high-volatility varieties, and even highly leveraged trading scenarios of various non-Crypto assets.

Against this backdrop, a more composable, easier to understand, and capable of activating long-tail asset value, as well as reaching global core asset leveraged trading, decentralized options system may be quietly taking shape.

The Popularity of End-Day Options and the "Impossible Triangle" of On-Chain Derivatives

Have you heard of or traded 0DTE options (end-day options)?

Currently, many Crypto players intersect with U.S. stock trading and should notice an interesting trend: in the U.S. stock market, more and more investors have begun to engage with options, especially end-day options, over the past two years. Accompanied by the prevalence of "financial nihilism" in the context of massive monetary easing since the COVID-19 pandemic, the 0DTE options trading in traditional financial markets has almost become a retail frenzy over the past five years:

Since 2016, small trading users have begun to flock to options, with the proportion of 0DTE options trading in total SPX options volume rising from 5% to 43%.

Source: moomoo.com

This also reflects a reality we must face: options are not just elite tools for institutions; they are evolving into an excellent tool for retail high-leverage trading needs.

The question arises: what about on-chain DeFi? Objectively speaking, perpetual contracts still dominate the high-leverage narrative in Crypto, as their simple structure, low thresholds, and instant liquidation characteristics align perfectly with the preferences of "low-attention" users.

In contrast, the complex structures and high thresholds of traditional options products (pricing models, exercise mechanisms, strategy construction, etc.) require a high level of user cognition, while on-chain infrastructure struggles to meet the demands for low costs, high precision, and continuous liquidity. This ultimately leads most DeFi options protocols to either remain at niche players or fall into an unsolvable hedge between "product elitism vs. user scalability."

Using a commonly understood term, in the Web3 world, the "impossible triangle" has become a common framework for describing systemic trade-offs (such as the trade-off between scalability, security, and decentralization in L1), and similarly, there exists a structural paradox in the on-chain derivatives field—liquidity, capital efficiency, and protocol risk can often only achieve two out of three:

• Liquidity: The foundation of all on-chain derivatives trading; a market without liquidity cannot achieve effective pricing;
• Capital Efficiency: A core indicator for product survival and growth, determining the motivation for users to continue participating;
• Protocol Risk: Price manipulation, slippage, and liquidity exhaustion can all become systemic flashpoints, as evidenced by Hyperliquid's recent crises;

Thus, options, as non-linear tools that far exceed futures in TradFi, have never found mature landing scenarios on-chain. But is there really no opportunity for "on-chain options"?

Just as end-day options have become popular in the TradFi market, Fufuture's proposed "coin-based perpetual options" may also be a good entry point to avoid a series of classic traps of on-chain options—it takes a different approach by abandoning the complex structure of "exercise date + order book + Black-Scholes pricing" in traditional options, instead constructing a completely new system based on Crypto infrastructure around the "unlimited extension + daily premium settlement" mechanism:

Users do not need to choose an exercise date; they can maintain their positions by paying daily premiums. The maximum loss for buyers remains the paid premium, while the profit potential is unlimited. Prices are anchored by external oracles, and core asset gains and losses are calculated in a coin-based manner (e.g., ETH/USDT settled in ETH).

This minimalist design greatly reduces the cognitive threshold for users (no need to consider exercise time and strategy construction), making the options trading experience more aligned with the rhythm and habits of perpetual contracts. For users pursuing short-term volatility arbitrage and emotion-driven trading, Fufuture's structured options products resemble a "day contract + time leverage hybrid" with explosive odds.

Thus, the core design philosophy of Fufuture can be summarized in one sentence: to provide options with a "contract-like smooth trading experience" while retaining the "inherent non-linear return logic of options."

This structure essentially breaks down the "time dimension" of traditional options into "daily dynamic positions," solving the cognitive barriers of complex options exercise paths and user understanding of when to close positions. Additionally, through the daily premium model, it integrates high-odds structures into the on-chain financial context in a more sustainable way.

Transforming "end-day options" into perpetual options undoubtedly presents the most "gambling" and high-odds attractive choice for users, especially when they discover that they can even participate in high-leverage derivatives trading using meme coins that are dormant in their wallets, without worrying about liquidation risks. The balance of power between on-chain and CEX may truly begin to tilt.

Deconstructing Fufuture: Coin-Based, Perpetual "End-Day Options," Trading System

To understand the innovations of Fufuture, we must start with three keywords: coin-based, perpetual options, and trading system. They do not exist in isolation but together form the core code of Fufuture's innovative architecture.

The design of coin-based + perpetual "end-day options" provides users with an options scenario that offers a "contract-like trading experience," retaining the high-odds characteristics of non-linear leverage while simplifying the complex cognitive barriers of options. The specific mechanisms will be detailed later.

Before that, it is essential to clarify a premise regarding the "trading system." Fufuture is essentially not just a simple on-chain version of an options product but through a more user-friendly options structure, deeply adapts to on-chain trading needs, constructing a new paradigm of on-chain derivatives that allows users to better utilize Crypto long-tail assets and trade mainstream assets with low thresholds and high leverage.

In other words, Fufuture's ambition goes far beyond "putting an options product on-chain." It aims to create a trading paradigm with high adaptability, composability, and extensibility in the on-chain derivatives space. Therefore, it is not a "CEX alternative," but through structural innovation, captures trading potential that has not yet been released but truly exists, especially the demand for long-tail assets to participate in derivatives trading and retail low-threshold high-leverage speculation.

This is also Fufuture's greatest imaginative space, injecting a new possibility into the on-chain derivatives market—not just to serve existing trading behaviors but to create the ability to serve "uncaptured trading demands" through structural design.

1. Coin-Based: Unlocking the Derivative Potential of Long-Tail Assets

Compared to traditional options that mostly use stablecoins as margin and settlement units, Fufuture's "coin-based" design essentially reconstructs the leverage trading relationship between users and assets from two core dimensions:

• Margin Dimension: Fufuture allows users to use any on-chain asset (including meme coins, small-cap governance tokens, and even some tokenized RWAs) as margin for opening positions, opening up derivative participation channels for assets that have long been excluded from mainstream trading systems;
• Settlement Dimension: Gains and losses are no longer anchored to USD but are settled directly in the original underlying tokens, making asset trading more aligned with the asset structure and cognitive habits of real holders;

This effectively activates the liquidity of long-tail assets, as many meme tokens and small projects lack futures contracts for support and cannot place orders on traditional trading platforms, making it difficult for their value to be reasonably discovered and utilized. Coin-based perpetual options can become the most cost-effective derivative path for these long-tail token holders, providing them with more investment choices and risk management tools.

For token holders, they often hold a large number of Alt tokens. In traditional trading models, they need to convert the underlying tokens into stablecoins for trading, facing risks of conversion costs and exchange rate fluctuations, and then need to convert back to the underlying tokens during settlement, making the entire process cumbersome and increasing uncertainty.

Fufuture's "coin-based" settlement method allows gains and losses to be directly reflected in the underlying tokens, avoiding conversion losses in intermediate steps, and aligns more closely with users' asset structures and investment habits, enabling them to manage their investment portfolios and risk-reward more clearly and conveniently.

Additionally, the "coin-based" gains and losses settlement method also provides an effective market-making means for these assets—first, users can directly participate in options trading using meme tokens like SHIB and SIREN, alleviating market selling pressure. Furthermore, users and even project parties can act as market makers by participating in "dual pools" (detailed below) to provide liquidity and earn profits, thereby stabilizing the supply-demand balance of Alt tokens from multiple dimensions.

2. Perpetual Mechanism: Flexible Gaming of the Time Dimension

As we know, the biggest difference between options and contracts is that options do not "liquidate" due to price fluctuations. Fufuture reconstructs this risk-return structure through "perpetualization," allowing users to engage in high-leverage speculation or hedging without the risk of liquidation.

We can understand its "non-linear returns" charm through a simple example. Suppose you have 5000 USDT when the BTC price is 88,000 USD:

• If you use a 20x perpetual contract to go long, once BTC drops more than 5%, it will trigger liquidation, losing all your principal. Even if the price later rises to 100,000 USD, your profit will be 0;
• If you use Fufuture perpetual options, you only need to pay a daily premium (e.g., 0.1%) to maintain that position. Even if BTC first drops to 70,000 USD and then rises to 100,000 USD, you can still close the position profitably;

Moreover, Fufuture's perpetual options also solve the "time cost mismatch" problem present in traditional options markets: for example, if you purchase a 3-month BTC call option, you need to prepay 20% of the premium (e.g., a 10,000 USDT position corresponds to a 2,000 USDT cost). Even if the market rises sharply in the first week, closing early still incurs the sunk cost of the remaining premium.

Fufuture allows investors to obtain position holding rights with "rental-like" costs through "dynamic installment payments"—the premium is paid as used, no longer requiring a high upfront premium for 3 months, but rather a daily dynamic payment, where the system automatically settles and updates positions every 24 hours, requiring no manual operation from users. If the premium balance is sufficient, theoretically, positions can be maintained indefinitely.

This also effectively pushes the breakeven point forward. Taking the aforementioned 3-month BTC call option as an example, if the premium is 20%, it means the underlying asset must rise at least 20% within 90 days to cover costs. However, Fufuture's perpetual options make the holding period and corresponding costs flexible parameters that can be adjusted at any time:

If the holding period is only 9 days, then only a 2% increase is needed to achieve breakeven; if the holding period is only 18 days, then only a 4% increase is needed to achieve breakeven (simple estimation, actual changes will not strictly follow linear variations).

This optimization of cost structure allows both short-term traders and long-term investors to find suitable strategic spaces—short-term speculators can capture profit opportunities in slight fluctuations, while long-term holders can speculate on asset appreciation at extremely low trial-and-error costs.

3. Dual Liquidity Pools: Risk Layering and Depth Assurance

In the on-chain derivatives market, "liquidity" is not just a matter of transaction efficiency; it also concerns the stability and risk resistance of the entire trading system. Without a sufficiently robust liquidity assurance mechanism, a single extreme market event could trigger the risk of systemic collapse.

For example, Hyperliquid, while relying on its innovative HLP (Hyperliquid Liquidity Pool) model to provide traders with high liquidity and low slippage market-making support, has faced multiple instances of liquidation due to risks associated with long-tail assets, exposing its shortcomings.

To address this structural risk, Fufuture innovatively introduces a dual liquidity pool mechanism, layering market-making risks and system liquidity:

• Private Pool: A professional liquidity absorption layer, can be seen as the "first-line buffer zone" for user options trading, open only to institutional market makers, actively absorbing trading orders and conducting hedging operations, bearing core risks as the main counterparty;
• Public Pool: The system's safety net layer, can be seen as the "last liquidity defense line" for user options trading, open to all ordinary users, serving as the final liquidity buffer for the system only when private pool liquidity is exhausted or order liquidation is interrupted;

When users open positions, the system prioritizes routing orders to the private pool and pushes order information to market makers. If the private pool market makers accept the order, they provide quotes using their own funds or hedging strategies— for example, if a market maker accepts a long position in BTC perpetual options, they can simultaneously buy the underlying asset in the spot market to hedge or lock in risk exposure through cross-platform arbitrage.

If private pool liquidity is insufficient or orders are interrupted due to liquidation, the system will transfer the position request to the public pool, where community LPs provide the final insurance liquidity.

The design of this dual liquidity pool essentially decentralizes the "market maker system" of traditional financial markets and the "liquidity pool" of DeFi, breaking the dilemma of "retail users bearing systemic risks" through risk layering, allowing professional institutions to become the main absorbers of risk.

This also effectively reduces systemic liquidation risks—during high volatility periods, professional LPs control the risk dominance, while ordinary LPs are not passively taking over, ensuring continuous trading depth and avoiding sudden evaporation of market depth due to the exhaustion of LPs with a single structure. Objectively speaking, this mechanism will undoubtedly promote community LP participation willingness, as public pool LPs do not bear first-line risks, resembling an insurance buffer for strategy overflow, returning to the role of "stable earners."

Overall, transforming "end-day options" into perpetual options undoubtedly presents the most "gambling" and high-odds choice for users. Fufuture achieves an organic integration of the insurance attributes of options and the leverage attributes of contracts through coin-based settlement, perpetual structural design, and layered liquidity mechanisms.

This makes Fufuture not just an "on-chain options platform," but more like an upgrade of a trading paradigm aimed at new crypto users, narrative investment trends, and long-tail asset liquidity—not only lowering the trading threshold for options but also reconstructing the time cost and strategic freedom of options, likely paving a new path for future on-chain speculative trading.

From "Options" to On-Chain Derivatives Ecosystem: The Decoupling and Reconnection of Crypto and TradFi

If you have truly experienced Fufuture's perpetual options products, you will notice its innovations compared to traditional on-chain options products.

Take users holding SHIB as an example (this further confirms the advantage of Fufuture's extremely low-cost entry into the game). Such meme assets can hardly serve as any form of trading collateral in traditional on-chain derivatives protocols, but on Fufuture, simply depositing SHIB into the platform allows it to be used as margin for trading.

In practical operation, as long as SHIB is deposited as "available margin," the entire trading process is almost indistinguishable from contract trading—no need for stablecoins as margin, no need to weigh choices of expiration dates, strike prices, or profit-loss curves. Just like daily contract trading, select the underlying asset, direction (long/short), and opening quantity, and you can start trading.

The system will automatically calculate the opening scale based on the available margin. For example, if I want to open a long position of 10 BTC, I just need to input the opening quantity and direction, click confirm, and the position will be opened. I only need to pay a small daily premium (automatically deducted from the SHIB margin), and the position can be extended indefinitely.

Subsequently, users can flexibly take profits or stop losses based on actual price fluctuations, and the operational experience is almost indistinguishable from spot trading, bridging the cognitive gap for users transitioning from spot participation to non-linear derivatives.

It is important to note that the "10 BTC" position here does not mean that one has truly borrowed or owned a corresponding bullish position of 10 BTC, but rather has the right to "close the contract and obtain returns linked to BTC's price increase" at any future time.

The key to this structure is that Fufuture adopts a "quantity-based" settlement model, with all calculations based on real-time oracle data on-chain, and all user gains and losses are internally settled in terms of the quantity of staked tokens, with profits and losses reflected only in quantity terms—when the price rises, profits are reflected as an increase in SHIB quantity, and when it falls, losses are reflected as a decrease in SHIB quantity.

For specific calculations, the number of tokens required to open a position = position * premium rate * current BTC\ETH index. For example, if the current BTC premium rate is 1.5% and the BTC price is 80,000, the number of tokens required to open one BTC position = 100,000 * 1.5% * 1 = 1200. This means that if a user opens a position of 1 BTC using USDT as margin, they need 1200 USDT, while if they use SHIB as margin, they need 1200 SHIB, with no change in quantity-based terms.

Now, suppose after opening a position of 10 BTC-SHIB call options, if the BTC price index indeed rises sharply (according to oracle quotes), from 80,000 to 88,000, then the profit in SHIB quantity = opening position × increase ratio = (88,000 - 80,000) × 10% = 80,000 SHIB (not considering premium and fee losses).

In short, the Fufuture protocol does not involve any token price conversions, only recording quantity increases and decreases, so the impact of price changes is only reflected when users withdraw tokens to external markets, greatly simplifying the system's sensitivity to severe market fluctuations and enhancing users' subjective strategic space.

This also constitutes one of Fufuture's most unique trading layer designs: allowing Crypto users to trade the assets they care about using the tokens they own, building native leverage with native tokens, without the cumbersome concepts of "liquidation lines," "exercise dates," or "IV curve matching." Positions can be closed for profits or losses at any time, and only a small daily premium needs to be paid for automatic renewal.

At this point, some readers may also realize that Fufuture's true disruptive nature lies in its technological architecture innovation, which infinitely expands the "supply-side boundaries" of the derivatives market. In simple terms, relying on a multi-oracle aggregation system (currently supporting ChainLink, Pyth, Apro), as long as an asset meets the conditions for being quoted by an oracle, it can form its own options market on Fufuture.

This means that Fufuture is not limited to mainstream assets like ETH and BTC; any mainstream asset that can be digitally quoted (large enough in volume and not easily manipulated in price) can generate an options trading market, such as obtaining U.S. stock prices (Tesla, Apple) or commodity prices (gold, oil) through compliant oracles, allowing users to speculate on traditional asset price fluctuations directly using cryptocurrencies.

We can imagine that when the protocol does not rely on fiat currency price systems, any asset that can be quoted by oracles can be seamlessly integrated: SHIB holders can trade the price fluctuations of gold, oil, or Tesla stocks using SHIB as margin, which undoubtedly signifies the emergence of a decentralized global asset trading network:

Allowing users to directly participate in the speculation of global mainstream assets using Crypto assets, removing intermediaries like banks and brokers, and greatly lowering participation thresholds, is also the charm of perpetual options, because perpetual contracts rely on funding rates to anchor spot prices, which can easily create price differences in low liquidity markets, while options only require paying premiums, completely decoupling from the actual delivery of the underlying assets.

In my view, this is also Fufuture's greatest imaginative space, as it injects a new possibility into the on-chain derivatives market—not just to serve existing trading behaviors but to create the ability to serve "uncaptured trading demands" through structural design.

We can even further associate Fufuture's strategic value and optimization path as an "over-the-counter market-making tool":

• Project Party Role: Injecting tokens as seed funding for liquidity pools (e.g., token A), essentially participating in "liquidity as locking";
• User Role: Using held token A to trade price indices provided by oracles for BTC/ETH/gold, forming a natural closed loop of "trading as locking";

In this context, project parties can initiate dual pools by injecting seed funds, attracting users to use their tokens as margin, indirectly achieving a positive cycle of "user positions - trading activity - price stability," and every transaction by users on Fufuture essentially participates in the ecological construction of "liquidity as locking," reducing market selling pressure from the source.

Essentially, this is a three-way win opportunity:

• Users do not need to sell tokens for stablecoins, gaining the convenience of low-threshold trading of global mainstream assets using their long-tail asset tokens, able to obtain profits through derivative speculation rather than passively waiting for token prices to rise, thus reducing market selling pressure;
• Project parties only need to participate in dual pools with ecological funds to encourage holders to complete liquidity locking, with both parties' funds locked in the pool, reducing market selling pressure;
• At the same time, connecting Crypto with global assets: by introducing stock and commodity prices through oracles, allowing SHIB and other token holders to trade the fluctuations of gold, oil, or Tesla stocks directly, without traditional financial intermediaries;

This essentially constructs a "modular trading engine for self-deployable options markets," allowing any community to activate new narrative flywheels and on-chain financial vitality for their tokens through Fufuture.

When meme coin holders can easily participate in global asset leveraged trading using SHIB, and when traditional financial price signals can be directly transformed into on-chain positions through oracles, a new financial ecosystem without intermediaries, asset boundaries, and controllable risks is quietly taking shape. This may not just be a simple technological breakthrough but the first true "decentralized leveraged trading revolution" in human financial history—it not only redefines the boundaries of on-chain derivatives but also outlines a future scenario of deep integration between Crypto and TradFi.

Project Roadmap

In March 2025, Fufuture will officially launch its V2 version, adding limit order functionality, a high-performance volatility modeling engine, and more flexible market-making rules, achieving significant upgrades in performance and user experience.

According to the latest data from the official website, currently, Fufuture V1 + V2 has integrated over 20 mainstream public chains, including BNB Chain, HashKey Chain, Manta Network, Mantle, Conflux, and Monad testnet, supporting the construction of over 100 BTC/ETH index-related trading pairs.

According to the official roadmap disclosure, Fufuture aims to expand to over 30 mainstream and emerging public chains by the end of the first quarter of 2025, striving for full industry coverage by the end of 2025.

In Conclusion

In Web3, many times, "equality" is the ultimate key to liberating product thinking.

Just like the narrative of on-chain options, from Hegic to Opyn to Lyra, it has always been trapped in the narrow alley of "professional strategy tools"—either complex trading mechanisms deter retail investors, or liquidity exhaustion reduces them to institutional arbitrage toys, thus deeply mired in the cognitive gap of "complex financial instruments," failing to produce a phenomenon player like GMX or Hyperliquid.

Ultimately, on-chain options urgently need a breakthrough from the ground up, more popularized. Only when they are no longer just strategic hedging tools for elite investors, no longer reliant on complex strategies and deep knowledge thresholds, but rather become a high-odds trading entry that every on-chain user can understand, use, and speculate on, will the true turning point of the on-chain options narrative arrive.

The significance of Fufuture's "coin-based + perpetual options" is precisely to start from this turning point, attempting to push on-chain options trading towards mainstream consensus with lower thresholds.

Objectively speaking, Fufuture is not merely making minor adjustments to the old templates of traditional finance but dismantling the complexity, inefficiency, and high thresholds of options product structures one by one—from coin-based architecture to perpetual design, from dual liquidity pools to decentralized risk isolation mechanisms, Fufuture is eliminating the barriers, constraints, and risks of traditional on-chain options at every step:

• Why can't Crypto users use the SHIB in their hands to directly bet on the fluctuations of global mainstream quality assets like BTC, ETH, gold, and oil?
• Why should the dominance of high-leverage trading be monopolized by centralized platforms and institutional market makers?
• Why must options be a game that only professionals can play, rather than a non-linear return opportunity that on-chain retail investors can participate in?

This is a liberation of financial imagination. After all, when meme coins are no longer just used for betting on price increases or decreases but become trading mediums connecting the fluctuations of global mainstream assets, Fufuture constructs a new logical closed loop:

Every Crypto token has the opportunity to become a settlement unit for global derivatives trading; every user can obtain high-leverage exposure to any mainstream quality asset on-chain; every project party/community can deploy their own options market and liquidity management pool with extremely low thresholds.

This essentially redefines the boundaries of crypto finance—connecting Crypto and TradFi in both directions, which also means Fufuture is no longer a CEX alternative or an elite toolchain of DeFi, but a global decentralized derivatives infrastructure that can actively "create trading demands" and activate asset potential.

Fufuture may become the first singularity of this on-chain financial explosion.