Pete

Lengthy update to my $DRV bull thesis incoming, but TLDR: Price has doubled to $0.08 since my first post and I'm still looking to accumulate more at this price level. That's virtually never the case in crypto. Candidly, as bullish as I am on $HYPE, I'm absolutely looking to trim some of my position if it were to quickly run up to $70 because the bull case just wouldn't be the same at that valuation. It's fees/mcap ratio would go from fair value territory to highly speculative. The valuation framework I apply to most coins can be succinctly summed up by four questions: 1. The classic "Can I see this doubling, and can the guy buying it from me also justify it doubling?". $DRV currently sits ~$100m FDV. My base case is $250-500m FDV, and I think there's a reasonable path to $1bn+ FDV over a 1-2 year time horizon. Buying here is still deep value territory by every metric. It's annualizing about $2.5m in fee revenue YTD, which puts it in the same ballpark as @Hyperliquid on a fee/FDV ratio (so significantly better than 99% of other coins). The key difference get's to my next question... 2. What's it's valuation relative to it's total addressable market (TAM)? While the TAM for on chain perps is massive, $HYPE valuation already reflects that. @DeriveXYZ occupies a similar, arguably even stronger, monopoly status in the on chain options market. $HYPE now trades at 300x the valuation of $DRV, and I do not think on chain perps have 300x the TAM of on chain options. Deribit does about 2x the options volume of OKX and is valued at ~10% ($2.9bn valuation when Deribit was acquired by Coinbase vs $25bn valuation for OKX on the recent ICE investment). Acknowledging different market conditions for those valuations, I still think it's conservative to say crypto perps only have a 25-50x larger TAM than options. If the on chain perp dex market is currently worth ~$40bn, I feel very comfortable saying on the on chain options protocols market can be worth ~$1bn. And @DeriveXYZ is 80-90% of it. 3. If my thesis is correct, does the token actually stand to benefit? Surprisingly important question in an industry full of useless governance coins with no value accrual. 🤡 The $DRV token is the only form of equity for @DeriveXYZ. No dual equity structure here. Currently doing 25% buybacks, which I actually think is the correct percentage at this stage of development. The market is not properly pricing in the current level of fee growth, and it is especially not pricing in the potential of that buyback % increasing over time. The team tokens don't even vest until certain metrics are hit, a practice I'd like to see the rest of the industry adopt. I feel comfortable in saying that $DRV token price will increase commensurate with Derive's metrics. 4. What's the catch? Why am I right and the market is wrong? What do I know that other's don't? Here are the other points of my thesis that I think are being mispriced by the market: The nature of the opportunity here is timing and attention. All crypto valuations are highly depressed (or simply finding fair value justifiably much lower). This is not the only 5-10x candidate out there right now. There's just no eyes on it and not enough money looking to invest in liquid tokens. On chain options used to have a terrible UI/UX. Not enough people know how to use RFQ (request for quote) and they think there is no liquidity because they're only setting limit orders in the order book. @DeriveXYZ is accomodating massive size via their RFQ system. You can see massive positions getting filled. As more people understand this, adoption is likely to skyrocket. In the same way that @HyperliquidX at it's core is part regulatory arbitrage (giving US traders access to perps when they couldn't get Binance/OKX/Bybit accounts), @DeriveXYZ is connecting you directly with top OTC desks that would never deal with you directly. There is a huge moat in doing all the BD work to provide users this access. Perps volume and OI on @DeriveXYZ HAVE to scale with increased options volume and OI. Market makers need to hedge their positions on app to benefit from cross margining and netting of risk. If I buy 100 $BTC calls, the maker that sold them to me needs to hedge that delta via an offsetting perps position. It is massively advantageous, if not necessary, for them to do this on @DeriveXYZ. This is why there's $1bn $BTC OI on Deribit perps. @HyperliquidX is obviously the premier and superior perps dex, but don't underestimate @DeriveXYZ perps volume on $BTC, $ETH, $SOL, and $HYPE going forward. In a world of useless perp dexes getting wash trade volume, they are positioned to get meaningful and durable perps flow. Market is absolutely not pricing any perps adoption growth for them. On chain forms of yield and carry are drying up. @ethena Funding rate arb, @pendle_fi PT token looping, perps dex point farming, it's all barely above the risk free rate. All of these forms of excess yield were always destined to dry up. The only meaningful way to generate excess yield will be taking the risk and selling volatility. This is why $IBIT options do so much volume. Institutions love harvesting vol premium. Whether they know it or not, all @Uniswap or @aeroxyz LP's are just selling volatility for yield. I'd argue most of them are being wildly undercompensated for the volatility they are selling. Options are the correct and only way to express these views, and more and more teams will try to productionize options into a more pleasant UI/UX for users looking to generate income against their crypto at the expense of taking on that volatility. Obviously I'm biased and I own some $DRV. But it's objectively shaping up to be one of the best growth stories of 2026. Don't look a gift fire horse in the mouth; $DRV is still a steal at this level.