The derivatives market offers two collateral options: stablecoin-margined positions (dollar-pegged and stable) and crypto-margined positions (subject to market volatility). We assess collateral health using the Realized Cap Leverage Ratio for each type.
During 2018–2021, crypto-margined collateral dominated the market. Combined with 100x leverage availability, this volatile collateral base significantly worsened the May 2021 market crash.
Post-FTX collapse, the market has fundamentally shifted. Stablecoin-margined collateral now accounts for the majority of open interest, representing a maturation toward more stable risk management practices and reduced systemic vulnerability.
