For years, the assumption was that once markets became large enough, the institutions would arrive. But the reality is Institutions come onchain when the infrastructure fits the way they already operate.
That is why Derive is partnering with BitGo to expand institutional access to onchain options, with Strands providing the API and tokenization infrastructure that connects assets held in BitGo custody to Derive.
Custody is where institutional adoption starts
An individual trader can move assets to a new platform in minutes. For an institution, the same decision can involve investment committees, compliance reviews, legal approvals, operational controls and counterparty assessments.
Who controls the assets? What happens if the venue fails? How are transactions approved? Can the activity be reconciled with existing reporting systems? Does the structure meet the fund’s internal custody requirements? Institutional adoption will come through familiarity.
Institutional need for options
The first wave of institutional crypto adoption focused heavily on buying and holding assets. As institutional portfolios grow, options give institutions a broader set of tools for managing and capitalizing on risk.
Our partnership with Strands makes that possible by securely referencing eligible balances held with BitGo and issuing a corresponding 1:1 onchain proxy that can be used as collateral on Derive.
Setting the stage for V3
This partnership began with BitGo clients who had already tested Derive and wanted a more direct way to access the platform without changing how they custody their assets. As in traditional markets, custody and execution are becoming separate layers, allowing institutions to keep assets with a trusted custodian while trading elsewhere.
Derive V3 is being built for that market. Institutions will bring larger pools of capital, while vaults will package strategies such as covered calls, volatility harvesting and systematic hedging into products that are easier to allocate to and scale.
