Bringing Options to Arbitrum

For years, options have been one of the most powerful instruments in finance, used to hedge risk, express nuanced market views, and construct strategies far beyond simple long or short positions. Yet in DeFi, options have remained stubbornly niche. Not for lack of innovation or demand, but because the infrastructure simply wasn’t ready.

Until now.

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For most of DeFi’s history, options have felt like a natural fit onchain: programmable, composable, and theoretically trustless. In practice, they never worked. Not because of a lack of demand, but because the underlying infrastructure was never designed to support the realities of options trading. High gas costs, unpredictable latency, fragmented liquidity, and rigid collateral models made even basic options strategies expensive, slow, or outright impractical. The result was a long list of well-intentioned attempts that proved the concept, but never crossed the threshold into real, sustained usage.

Ethereum mainnet laid the foundations for DeFi, but it was never designed for the kind of high-frequency, latency-sensitive trading that options require. Every options trade involves more than a simple buy or sell. Positions need to be adjusted, rolled, hedged, and closed, often multiple times over the life of a trade.

On mainnet, that reality collided with two hard constraints: gas fees and latency.

High gas costs turned even basic options workflows into expensive exercises, pricing out all but the most patient or well-capitalized users. Latency compounded the problem. When markets move quickly, delayed execution goes from inconvenient to risky. Options demand precision, and Ethereum mainnet couldn’t deliver it at scale. The result was predictable: options existed, but they never became practical for active trading.

Layer 2s promised faster execution and lower costs, and they delivered on both. But for options, that still wasn’t enough. The fundamental challenge was risk modeling.

Efficient options markets depend on portfolio margin: a system that evaluates risk across an entire portfolio rather than isolating each position. Without it, capital efficiency collapses, collateral requirements balloon, and advanced strategies become impractical.

Building true portfolio margin fully onchain is extraordinarily difficult. Even on L2s, most systems fell back on simplified or isolated margin models, recreating many of the same constraints seen on mainnet. So while L2s reduced friction, they didn’t unlock the full potential of options trading.

Read more about portfolio margin on Kyan here.

As DeFi expanded across multiple chains, another issue emerged: liquidity fragmentation.

Options markets are inherently thinner than spot or perpetual markets. Spreading that limited liquidity across multiple networks only made matters worse. Pricing diverged, spreads widened, and arbitrage became inefficient or outright impossible. Instead of one deep, resilient market, the ecosystem ended up with many shallow ones, none capable of supporting sustained, high-quality options trading.

Premia V3 represented a meaningful step forward. Its fully collateralized, options-only model eliminated counterparty risk, which was a major achievement in itself. But that safety came at a cost.

Fully collateralized options are capital intensive by design. Without portfolio margin, traders had to lock up significant capital for relatively modest exposure. That tradeoff may work for certain use cases, but it fundamentally limits scalability. Add to that the natural illiquidity of options markets for altcoins, plus the lingering L2 and multichain frictions, and it became clear that an options-only approach, no matter how elegant, wasn’t enough.

Arbitrum is the most liquid EVM-based hub in the ecosystem. It’s where serious DeFi users still operate, where composability matters, and where cross-protocol integrations are possible.

Arbitrum continues to be the most widely adopted Layer 2 for DeFi applications, and its roadmap (decentralized sequencing, smart accounts, deeper self-custody guarantees) aligns perfectly with the future of onchain trading. Choosing Arbitrum was about building where liquidity, users, and infrastructure already converge.

Kyan brings portfolio-margined options, perps, and combo trades together under a single risk engine, for the first time on Arbitrum.

This is a unified system where positions interact, offset risk, and unlock capital efficiency in ways that isolated margin models never could. Strategies that were once exclusive to centralized venues now become possible onchain, without sacrificing performance or flexibility.

Crypto trading has historically forced users into a tradeoff: convenience or control. Centralized exchanges removed complexity but demanded custody. DeFi preserved sovereignty but required technical fluency. Kyan was built to remove that false choice.

From the first interaction, Kyan users can enter the platform without touching any of the traditional onchain hurdles. There’s no requirement to install a browser wallet, no need to manually configure networks, no confusion around gas tokens or approvals. The onboarding flow is intentionally designed to feel like a modern trading venue rather than a protocol interface. Behind the scenes, Kyan handles the blockchain interactions, so users can focus entirely on trading.

Abstraction doesn’t mean sacrificing ownership. For experienced users who prefer full control, Kyan supports direct self-custody. You can connect your own wallet, manage your keys, and interact with the exchange in a fully sovereign way. Kyan simply offers an optional layer that removes complexity without removing choice.

Abstraction is optional. Control is not.

More about how Kyan is bringing options onchain in this article.

Onchain options didn’t fail because they lacked demand. They failed because the ecosystem lacked the right combination of infrastructure, risk modeling, and liquidity.

By pairing portfolio margin with integrated options, perps, and multi-legs, on a network built for onchain derivatives trading, Kyan is closing that gap. And in doing so, it’s bringing options to Arbitrum in a way that finally makes sense.

This isn’t just about launching another product. It’s about finishing something DeFi started years ago.

Make sure you’re first in line for Kyan’s events and updates by signing up here.

​Kyan will be a significant upgrade for anyone trading decentralized derivatives.

If you have any questions, hop into our Discord or shoot us a message on X. We would love to know your thoughts!

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