Derive unveils v3 upgrade to enhance onchain options trading

Derive, the protocol formerly known as Lyra Finance, has proposed a sweeping V3 upgrade that would rebuild its onchain options and perpetual contracts platform from the ground up. The upgrade, submitted as a Derive Improvement Proposal (DIP), marks a shift from the platform’s current optimized Layer 2 chain to a zero-knowledge exchange model verified directly on Ethereum’s Layer 1. What V3 actually changes At its core, the V3 architecture replaces Derive’s existing L2 chain with a high-performance matching engine and sequencer running inside a zkVM. Think of a zkVM as a computational black box: it processes transactions and then generates a cryptographic proof that everything was done correctly, which Ethereum’s mainnet can verify without re-executing every trade. The result is a system that can theoretically handle hundreds of billions of dollars in daily transaction volume while supporting thousands of cross-margined positions per portfolio. The existing Derive Chain, the optimized L2 that powered V2, will be phased out entirely. All positions and balances from V2 will migrate to V3’s initial state. Bridge funds will transfer to Ethereum L1, and a new token, stDRV, will launch on...