dYdX

dYdX is a DeFi protocol focusing on perpetual contracts products built on top of the Starkware layer-2 network.

What is dYdX?

  • dYdx -at the time of writings- offers 29 perpetual markets including Litecoin, Enjin, Polygon, 0x, etc. 
  • Being built on top of the Starkware layer-2 protocol enables the dYdX platform to offer gasless deposits and low transaction fees for users to submit their trades.
  • Transactions settled on layer-2 utilizing zk-rollup resulting in a much higher trade throughput and lower transaction size.  
  • dYdX was initiated in 2017 with its first product being a margin trading platform called Expo. The platform initially sourced liquidity from 0x until decided to build its own order book in late 2019. In 2020 the project decided to move into perpetual driven by the explosion of volume on perpetual led by Bitmex. The moves made dYdX the first project who build a perpetual platform in the form of DEX.   

Key Metrics

TickerDYDX
Token NamedYdX
Token Type/ProtocolERC20
Total Token Supply1,000,000,000
Current Circulating Supply See Coinmarketcap
Market CapitalisationSee Coinmarketcap
Token Creation DateJuly 2021
Can it be mined?No

Who is behind dYdX?

dYdX was first founded in 2017 by Antonio Juliano, a Princeton computer science graduate and a former software engineer at Uber and Coinbase. A16z and Polychain were the first investors to the project with a $2 million seed round and $10 million series A. In July 2021, dYdX Foundation was formed with council members include Arthur Cheong, Rebecca Rettig, and Markus Spillman.    

What is the purpose of dYdX?

DYDX is the governance token of the dYdX platform to enable a decentralized governance by the token holders. The token can be used to participate in some staking pools to receive staking rewards from liquidity mining, and also receive trading fee discounts to trade on the dYdX DEX. 

Insights

  • dYdX is -at the time of writings- among the most widely adopted DeFi protocol with around $2.6 billion daily trading volume and $960 million open interest.
  • Starkware smart contract that is used by dYdX has been audited by PeckShield with no major vulnerabilities found.

Risks

  • As a DApp, dYdX value is highly dependent on the usage of the platform. There is a risk that the product dYdX currently has is becoming less attractive in the future due to innovation from other platform or user behavior change. Hence, the platform need to anticipate where the user preferences are heading and prepare necessary product innovation to maintain the market share.  
  • dYdX is a decentralized exchange, however the platform is actually not fully decentralized yet. There is still a central point of control from the team developing the project. Efforts to make the platform fully decentralized is ongoing and implementation is expected to occure in late 2022. 

News and Updates

  • At the time of writings dYdX is opening whitelist for beta testing of the new app on iOs.
  • dYdX on mid-January announced a reduction in the platform trading fees for as low as 0.020% for single-maker types of trades for tier I users. That is a 66% reduction from the previous structure to make the platform more competitive. The fee structure is planned to be revisited every three months. 
  • dYdX is at the time of writing looking to expand to several regions such as Japan, India, South Korea, and South East Asia. 

Disclaimer:
All investment is speculative and involves substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.  

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