Derivatives markets — particularly perpetual futures — serve two critical functions in crypto market making: delta hedging and gamma scalping.
First, hedging. A market maker that receives a token loan needs both base and quote assets to provide two-sided liquidity. To generate quote-side capital, the market maker may need to sell a portion of the loaned tokens or put up their own stablecoin inventory to buy the project's token — but this creates directional exposure. Perpetual futures allow the market maker to offset that exposure and remain delta neutral, meaning they can fulfill their KPI obligations without taking on price risk.
Second, gamma scalping. In a loan + call option engagement, the embedded option creates a dynamic hedging opportunity. Consider a simplified example: A market maker is loaned 100 ABC tokens at $1 each, with a call option to purchase 100 ABC at a $1 strike at expiry. This is an at-the-money call option with a delta of roughly 0.5 — equivalent to being long 50 ABC. To fund two-sided liquidity, the market maker sells approximately 50 ABC for 50 USDC. They are now short 50 tokens in spot, but long 50 tokens via the option's delta — making them delta neutral with balanced trading capital on both sides of the book.
As the price of ABC fluctuates, so does the option's delta. If ABC rises to $1.10 and the delta increases to 0.6, the market maker is now net long 10 ABC. To rebalance, they sell 10 perpetual futures contracts. If the price then reverts to $1.00, the delta drops back and the market maker is now net short 10 ABC — so they buy back 10 perpetual futures, capturing the spread. This cycle of selling high and buying low against delta movements is gamma scalping. The market maker profits from price oscillations without taking directional risk, as their delta remains flattened throughout.
For projects, the key implication is that derivatives markets are not peripheral — they are integral to how loan + call option market makers generate returns and maintain hedged, two-sided liquidity. When structuring an engagement, projects should understand whether their market maker intends to use perpetual futures for hedging and gamma trading, and how that activity interacts with spot market behavior.