@Sakura please summarize this article, thanks uwu.
TLDR
The article argues that perps could help on-chain options grow: they give option sellers a nearby market to hedge in, while options let traders be right without having to be right immediately. But better infrastructure has not yet solved the biggest challenge: attracting reliable options sellers. 
Key Points
Options buy time; perps don’t. A leveraged perp can liquidate a trader before their long-term view plays out. In the article’s historical BTC test, a 10× long perp was liquidated in 47% of trades held for up to 180 days—even when BTC ultimately ended above the entry price.
Options have struggled with liquidity and capital costs. There are many strikes and expiries to quote, sellers need to hedge, and fully collateralising options can tie up too much capital.
Perp venues may provide the missing infrastructure. Deep perp markets, shared accounts and portfolio margin can make hedging cheaper and selling options more practical.
The article highlights different possible winners: Hyperliquid as a hedge-market “landlord,” Derive as options infrastructure for other apps, and Paradex as a venue for institutional block trades.
The market is still small and seller incentives remain unproven. The article sketches options embedded in liquidity pools and a token-incentivised “Papertrade for options,” while noting that rewards may not keep sellers quoting once conditions change.
In-depth summary
The central distinction is time risk. A perp gives a trader leveraged exposure, but a sharp move against them can trigger liquidation before their thesis has time to work. An option buyer pays a premium for a defined period of exposure: they can lose that premium, but generally won’t be forced out just because of a temporary price dip. The article illustrates this with a BTC market replay and a longer historical test, arguing that perps can eliminate trades that would eventually have been profitable.
The article says earlier on-chain options projects struggled because liquidity was fragmented across many contracts, sellers had difficulty hedging, and collateral requirements made the returns unattractive. Newer designs may improve the economics by putting options alongside deep perp markets and allowing positions to share collateral through portfolio margin. It surveys several approaches: Hypercall connects options sellers to Hyperliquid’s perp liquidity; Derive has an established options book and is positioned as potential infrastructure; Paradex brings in institutional block-trading flow; and Rysk tries to turn token holders into covered-call sellers. The article’s data suggests BTC and ETH options on Derive have improved, but liquidity across other assets remains thin.
Finally, the author considers how to bring in more sellers and users: options could be distributed through liquidity pools, or a Papertrade-style venue could reward buyers when their options expire worthless while a house vault sells and hedges contracts. These designs face real risks—including large losses during sharp market moves and whether incentives can last. The article’s broader thesis is that options may grow around perp markets, but the sector is still early; its proposed beneficiaries depend on where liquidity, hedging and distribution ultimately concentrate. 
ELI5
A perp is like betting on a price move with borrowed money: if the price briefly goes the wrong way, you can be kicked out. An option is more like paying for a ticket that gives your idea time to work—you might lose the ticket price, but a short-lived dip need not end the trade. The article says options could become easier to trade if sellers can hedge them cheaply using the perp markets that already exist.
Writers main point
Perps may be the foundation that makes on-chain options more viable, because they give sellers places to hedge. Whether that leads to lasting growth depends on attracting sellers who can keep quoting options without relying indefinitely on incentives.
Relevant links
- Original article: Perps Will Eat Options
- Trading Optionality
- DeFiLlama: on-chain options
- DeFiLlama: perp DEXs
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