Derive V1 Review 2026: The Legacy Onchain Options Protocol

Derive V1 is the first generation of the Derive options protocol, which was earlier known as Lyra. DefiLlama describes it as the first complete decentralized options protocol built on Ethereum, and tracks it on Ethereum, Arbitrum and Optimism.

The current Derive homepage focuses on V3: options, perpetuals, spot and vaults with CEX-like speed and self-custody. V1 is not the headline product anymore, and the help centre includes a guide for withdrawing liquidity from V1 vaults.

Tracked TVL for V1 is about $134k, with no change over seven days. The homepage reports $40.78B in cumulative volume and $10.11M in revenue for the wider Derive platform, which covers all versions rather than V1 alone.

An options contract gives the buyer the right, not the obligation, to buy or sell an asset at a set price by a set date. Derive V1 runs this kind of market onchain: smart contracts hold collateral and settle positions, and users keep funds in their own wallets rather than with a company.

The protocol also uses liquidity vaults, where depositors supply capital that backs option trades. The help centre's reference to withdrawing liquidity from V1 vaults confirms that vaults are part of the V1 design. Liquidity providers take on the risk that options they back move against them.

The current Derive platform has moved beyond this. Its V3 uses sub-millisecond offchain order matching with zero-knowledge proofs that verify operations on Ethereum, plus margin systems and RFQ for large trades. These are V3 features, not V1 ones.

The homepage does not publish a V1 fee table. It links a fee schedule and a market-maker fees page, and users would see exact costs there and in the trading app before placing an order.

On options platforms, costs generally include trading fees, spreads and gas on the chain used. How these apply to V1 specifically is not stated, so check them before depositing.

Derive V1 is non-custodial, so funds sit in smart contracts rather than with a central company. That removes exchange counterparty risk but adds contract risk. DefiLlama lists two audits for the entry, though the auditors are not named. The homepage audit note covers V3, where ZKSecurity audited the core contracts and protocol and all critical findings were addressed.

Because V1 is a legacy deployment with low TVL, users should follow the project's migration guidance and not assume ongoing development. The site's terms include a question on who can and cannot use Derive, so check eligibility in your jurisdiction. Options are high-risk instruments and can lose all of the premium paid.

Derive V1 suits existing users with V1 vault liquidity or open positions, and researchers tracing the history of onchain options. New traders looking for options or perpetuals will probably be better served by the current Derive platform, and should only trade derivatives if they understand the risks.