Derivatives help traders manage risk and speculate on asset prices. Traditionally based on stocks or commodities, they have now evolved into on-chain derivatives, operating entirely on decentralized networks. Unlike centralized platforms, these derivatives offer transparency, composability, and censorship resistance, allowing traders to engage in futures, options, and synthetic assets without intermediaries. In this article, SwapSpace CEO Andrew Wind explores the mechanics, benefits, innovations and risks of on-chain derivatives.