dYdX stands as a prominent decentralized perpetual exchange (DEX) operating on its native Layer 2 solution, the dYdX chain. By seamlessly integrating a Layer 2 scaling solution with a perpetual DEX, dYdX aims to provide traders with an experience mirroring that of leading centralized exchanges (CEXs).
Table Content:
- Core Products of dYdX
- dYdX Chain: The Foundation for Scalability
- dYdX Perpetual DEX: Trading Redefined
- dYdX Prediction Market: Leveraging Collective Wisdom
- Key Advantages of dYdX
- DYDX Token: Utility and Governance
- DYDX Token Key Metrics
- DYDX Token Allocation
- DYDX Token Vesting Schedule
- Team, Investors, and Partners
- The Team Behind dYdX
- Investors and Partners
- Similar Projects
Beyond its popular derivatives offerings, dYdX has also introduced a novel Prediction Market service, enabling users to engage in predicting political outcomes.
The dYdX trading interface.
Core Products of dYdX
dYdX Chain: The Foundation for Scalability
The dYdX chain is a Layer 2 network built upon the Cosmos SDK, utilizing the CometBFT consensus mechanism. Its purpose, similar to the Hyperliquid blockchain, is to serve the specific needs of the dYdX perpetual exchange. This specialized architecture allows dYdX to inherit the high transaction speeds, robust security, and scalability inherent to the Cosmos ecosystem.
Furthermore, the latest iteration of the dYdX network offers users zero gas fees for trading, covered by the dYdX team. dYdX’s transaction fees primarily address two key areas:
- Layer 1 Execution Costs: These cover the expenses associated with state changes and data storage on the underlying Layer 1 blockchain. All Layer 2 transactions ultimately require recording on Layer 1.
- Data Availability Costs: These fees ensure that all transaction data is readily accessible for verification and validation by all relevant parties on Layer 1.
dYdX Perpetual DEX: Trading Redefined
The dYdX Perpetual DEX is the platform’s flagship product, boasting an interface remarkably similar to derivatives offerings on centralized exchanges. Its user-friendly design, coupled with support for a diverse range of trading pairs, may even lead some to mistake it for a centralized platform. According to DefiLlama, dYdX has facilitated over $1.2 trillion in trading volume across more than 50 asset pairs in its three years of operation.
dYdX also features competitive trading fees, ranging from 0.01% to 0.05%, and offers trading rewards to active users, incentivizing participation and volume. Beyond futures trading, dYdX supports options and staking of the dYdX token for earning interest.
The dYdX Perpetual DEX interface.
dYdX Prediction Market: Leveraging Collective Wisdom
Launched on September 30, 2024, the dYdX Prediction Market allows users to speculate on political events, such as the outcome of the US Presidential election. Unlike prediction markets utilizing Automated Market Makers (AMMs), dYdX employs a derivatives-based model.
For instance, in predicting the 2024 US Presidential election, a user believing in Donald Trump’s victory would “Long” a TRUMPWIN/USD token with chosen leverage. The token price reflects Trump’s perceived win probability. If Trump wins, TRUMPWIN reaches $1; if he loses, it drops to $0.
Consider User A predicting Trump’s victory with $100 and 5x leverage:
- Current TRUMPWIN price: $0.5 (50% win probability).
- Trump wins: TRUMPWIN reaches $1, yielding User A a $250 profit.
- Trump loses: TRUMPWIN goes to $0, resulting in a total loss for User A.
Users can trade the TRUMPWIN token within the derivatives section.
Key Advantages of dYdX
dYdX offers several compelling advantages:
- Low Trading Fees: Users enjoy zero gas fees, only incurring minor funding and taker/maker fees.
- High Liquidity: As a leading perpetual DEX, dYdX boasts high liquidity and trading volume, resulting in minimal price slippage.
- User-Listed Token Pairs: Uniquely, dYdX allows users staking over 2,000 dYdX to list new token pairs for trading.
DYDX Token: Utility and Governance
DYDX Token Key Metrics
- Token Name: dYdX
- Ticker: DYDX
- Blockchain: dYdX Chain
- Contract: ibc/831F0B1BBB1D08A2B75311892876D71565478C532967545476DF4C2D7492E48C
- Token Type: Utility, Governance
- Total Supply: 1,000,000,000 DYDX
DYDX Token Allocation
- Investor: 27.7%
- Community Treasury: 26.1%
- dYdX Employees & Consultants: 15.3%
- Trading Reward: 14.5%
- Future Employees & Consultants: 7%
- Retroactive Mining Reward: 5.03%
- Liquidity Provider Reward: 3.28%
- Liquid Staking Pool: 0.58%
- Safety Staking Pool: 0.53%
DYDX token allocation.
DYDX Token Vesting Schedule
The DYDX token vesting schedule is structured with varying unlocking periods for different groups, including investors, employees, and community rewards. Specific details can be found in the original article.
Team, Investors, and Partners
The Team Behind dYdX
dYdX is led by a team of experienced professionals with backgrounds in leading technology companies. Key members include Antonio Juliano, Founder, and Charles d’Haussy, CEO.
The dYdX team.
Investors and Partners
dYdX has secured over $90 million in funding across four rounds from prominent investors like a16z crypto, Polychain Capital, Paradigm, and others. Strategic partners include MakerDAO, Huobi, and Banxa.
Similar Projects
Comparable projects in the decentralized derivatives space include:
- bZx Protocol (BZRX): A protocol enabling the creation of decentralized lending, borrowing, and margin trading applications.
- Kine Protocol (KINE): An Ethereum-based perpetual DEX for derivatives trading.
