What Is the Volatility Smile in Crypto Options and How Does Network Maturity Affect It?

The Volatility Smile is a pattern where out-of-the-money (OTM) and in-the-money (ITM) options have higher implied volatility (IV) than at-the-money (ATM) options. This shape suggests the market expects large, unexpected price moves.

As a blockchain network matures and price discovery stabilizes, the smile often flattens or becomes less pronounced, indicating a more normalized risk profile.