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DYDX

dYdX  

#DYDX

DYDX Price:
$1.35
Volume:
$54.5 M
All Time High:
$27.90
Market Cap:
$0.2 B


Circulating Supply:
166,119,690
Exchanges:
25
Total Supply:
1,000,000,000
Markets:
33
Max Supply:
Pairs:
29



  DYDX PRICE


The price of #DYDX today is $1.35 USD.

The lowest DYDX price for this period was $0, the highest was $1.35, and the current live price for one DYDX coin is $1.35155.

The all-time high DYDX coin price was $27.90.

Use our custom price calculator to see the hypothetical price of DYDX with market cap of ETH or other crypto coins.


  DYDX OVERVIEW


The code for dYdX is also #DYDX.

dYdX is 1 year old.


  DYDX MARKET CAP


The current market capitalization for dYdX is $224,518,918.

dYdX is ranked #139 out of all coins, by market cap (and other factors).


  DYDX VOLUME


There is a large volume of trading today on #DYDX.

Today's 24-hour trading volume across all exchanges for dYdX is $54,510,339.


  DYDX SUPPLY


The circulating supply of DYDX is 166,119,690 coins, which is 17% of the total coin supply.


  DYDX BLOCKCHAIN


DYDX is a token on the Ethereum blockchain.


  DYDX EXCHANGES


DYDX is integrated with many pairings with other cryptocurrencies and is listed on at least 25 crypto exchanges.

View #DYDX trading pairs and crypto exchanges that currently support #DYDX purchase.


  DYDX RESOURCES


Websitedydx.exchange
Whitepaperwhitepaper.dydx.exchange
Twitterdydxprotocol
Redditr/dydxprotocol
Telegramdydxofficial
DiscordTuze6tY
Mediumdydxderivatives


  DYDX DEVELOPER NEWS



dYdX Closes $10M Series B Investment

We're excited to announce that dYdX has raised a $10M Series B round led by Three Arrows Capital and DeFiance Capital! We welcome new investors: Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group, and RockTree Capital. Additionally we're grateful for the continued support from a16z, Polychain Capital, Kindred Ventures, 1confirmation, Elad Gil, Fred Ehrsam, and other existing investors who participated in this or past rounds. This is an important milestone for the dYdX team. Perpetuals trading is an exciting use case for blockchain technology and we're thrilled to be building a core component of the decentralized financial ecosystem. dYdX's decentralized exchange infrastructure combines non-custodial, on-chain settlement with an off-chain low-latency matching engine with order books to deliver an institutional-grade, liquid, and low slippage trading experience for the decentralized finance world. Our products empower traders to better manage risk, more efficiently allocate capital, and express more complex opinions on price and volatility. 2020 was a year of records: Total cumulative trade volume across Perpetuals, Margin, and Spot trading increased 40x, reaching $2.5 billion in 2020, up from $63 million in 2019., Margin / Spot Trade Volume: $1.9 billion in 2020, up from $63 million in 2019., Perpetuals Volume Trade Volume: $563M since the new protocol was launched in April 2020., Volumes on our perpetual contracts grew as a percentage of total trading volume, accounting for 41% of total trading volume in December., 2020 Loan Originations: $17.4+ billion from dYdX lending pools., User Growth: unique wallets depositing funds into dYdX's smart contracts increased by 4.8x from 8,000 wallets to 38,588 wallets through December 31., 6 new team members across Engineering, Design, & Growth., In 2020, we launched our decentralized Perpetual protocol for 3 markets and achieved our goal of $10M in average daily volume. This was just the beginning. In the second half of 2020, we've been building a new product for Perpetual Contracts on Layer 2, powered by StarkWare's Zero Knowledge Rollups. Since the start of 2021, total cumulative trade volume has surpassed $3.5 billion. In February 2021, we will launch our Layer 2 solution with StarkWare for cross-margined perpetuals to scale lower cost decentralized trading. We will be releasing more information on our alpha program soon.According to Su Zhu, Co-Founder, CEO and CIO at Three Arrows Capital: "dYdX was the first DeFi app I ever used and I am elated to have the chance to invest in them today."Arthur Cheong, Founder of DeFiance Capital said: "Antonio and the team have built a solid foundation for dYdX as one of the earliest and most successful DeFi protocols. We have been users since the early days and are excited to back dYdX in the current round to accelerate its mission to build the most powerful decentralized trading platform for cryptoassets.' We'll use the additional capital to: Decentralize more parts of our stack and hand over more control to our users, Rapidly add new assets and features to our perpetuals contracts, Partner with infrastructure players bridging the gap between centralized and decentralized finance, Strategically invest in international growth markets such as Asia, with a focus on Greater China, Continue to hire world-class engineers, designers, and business operators, Thanks to all for your support and feedback so far! If you're excited about what we're building at dYdX and want to join the team, please check out our Careers page. We'd love to hear from you!About dYdX dYdX is a leading decentralized exchange built by developers on a mission to build open, secure, and powerful financial products. dYdX runs on audited smart contracts on Ethereum, which eliminates the need to trust a central exchange while trading. We combine the security and transparency of a decentralized exchange, with the speed and usability of a centralized exchange. Learn more at: https://trade.dydx.exchange/.Follow-Us Integral, Discord, Twitter, WeChat - dYdX Protocol, Youtube, LinkedIn,




dYdX - 2020 in Review

2020 was a huge year for dYdX! We built and launched our first protocol for Perpetual Contracts, saw many thousands of new traders use dYdX, and increased our trade volume by 40x. In the second half of 2020, we've been building a new product for Perpetual Contracts on Layer 2, powered by StarkWare's Zero Knowledge Rollups. 2020: a Year of Records Total cumulative trade volume across Spot, Margin, and Perpetuals increased 40x reaching $2.5 billion in 2020, up from $63 million in 2019., Over $1.9 billion in trade volume in Margin and Spot markets, and over $563 million in trade volume in Perpetual Contract markets since the new protocol was launched in April., Volumes on our Perpetual Contracts grew as a percentage of total volume, accounting for 41% of total trading volume in December., Over $17.4 billion in loans were originated from dYdX lending pools., Unique wallets depositing funds into dYdX's smart contracts increased by 4.8x from 8,000 to 38,588 wallets through December 31., We hired 6 new team members, across Design, Engineering, and Growth., These are important milestones for dYdX. Our decentralized exchange infrastructure combines non-custodial, on-chain settlement with an off-chain low-latency matching engine using order books. This allows us to deliver an institutional-grade, liquid, and low slippage trading experience for the DeFi world. Our products empower traders to better manage risk, more efficiently allocate capital, and express complex opinions on price & volatility. Our goal is to become the largest & most technologically robust exchange - period. To do this we're building a Layer 2 system with StarkWare enabling cross-margined Perpetuals, allowing for significant improvements to trading at scale. Our engineering teams are collaborating on a scaling solution based on StarkWare's StarkEx scalability engine and our Perpetuals smart contracts. The Layer 2 solution dramatically improves blockchain scalability by allowing any type of computation to move off-chain, while using the Ethereum blockchain as a public immutable commitment layer. StarkWare's integration with dYdX combines STARK proofs for data integrity with on-chain data availability to ensure a fully non-custodial protocol. Our new Perpetual Contracts will be ready soon. We are targeting an alpha launch in early February 2021 with a full production launch shortly thereafter. We are focused on delivering the best user experience and providing our traders with significantly lower gas costs, and in turn, lower trading fees. We will also be able to rapidly launch & spin up new trading pairs, allowing traders access to the exposure they want, when they want. We see massive growth for Perpetual markets on decentralized exchanges, and we are hyper focused on being the market leader. Perpetuals are an exciting use case for blockchains, and we're thrilled to be building a critical component of DeFi. We believe DEXs will continue to gain market share in relation to CEXs due to decreased switching costs, simple onboarding, better UI & UX, increased security guarantees, and more attractive trading products. We're excited about the future of finance and hope you will join us on our journey. Antonio Juliano Table of Contents: Trade Volume, User Growth, Margin & Spot (Solo Protocol), Perpetuals (Perpetual Protocol), Liquidity, Borrow & Lend, Other Updates, Download here.




How DeFi is Eating Traditional Finance

This article was originally posted on The Pomp Letter With the introduction of Bitcoin's genesis block, the world had its first truly decentralized financial application. Bitcoin enabled anyone in the world to store wealth without the need for a centralized party. That wealth could be taken and sent anywhere in the world, the only requirement was an internet connection. As the Bitcoin network grew in terms of number of holders and value transferred, developers began looking for ways to create more complex financial transactions. This was at odds with how the Bitcoin community viewed the tradeoffs between security and expressive financial applications, which created an unmet opportunity for a blockchain that could facilitate more complex financial contracts. When Ethereum launched, it aspired to be a world computer capable of powering an arbitrary number of applications through smart contracts. The ICO mania of 2017 reflected this vision, but Ethereum as a platform ultimately left much to be desired for most applications. Amidst all the noise, it became increasingly obvious that Ethereum was fertile ground for financial application experimentation. Ethereum drastically dropped the costs associated with a variety of financial transactions including capital formation, asset issuance (hence the ICO bubble), asset exchange, loan administration, collateral management, and much more. After the rubble of 2017 cleared, the Ethereum community was left with a burgeoning movement dubbed, 'DeFi' (short for decentralized finance). DeFi had immense promise given both how inefficient traditional finance was and how well its aims aligned with the core ethos of the crypto community. Ethereum's smart contracts enabled money to be managed programmatically, without the need of a central party, which in turn created many efficiency gains. Similarly, DeFi applications were open and permissionless. Just like Bitcoin, anyone could access them, all they needed was an internet connection. Compare this to the traditional financial system and it's easy to see how much more desirable DeFi is. In the traditional world, financial applications are difficult to access, rigid, hard to use, and most importantly, expensive. Early Signs of Product Market Fit Shortly after the Ethereum community rallied around DeFi and allocated engineering resources towards building out infrastructure, early signs of traction emerged. In these early days, the most promising developments were DeFi primitives: building blocks that could be built on top of each other to create more expressive applications. The composability of these primitives help create strong network effects, where the value of products and services grow as the number of DeFi users increases. The first use case to see large growth was stablecoins. Stablecoins are simple, they are assets designed to keep a peg to another asset, which in the case of the most popular stablecoins, is the dollar. With stablecoins, anyone can transact in dollars, globally, and with no delays. Stablecoins seem rudimentary on the surface, but being able to send dollars freely within the crypto ecosystem has always been difficult - the fiat world and the crypto world aren't very interoperable. Stablecoins really started to see growth when new primitives came to market. The ability to exchange stablecoins for crypto through decentralized exchanges such as  dYdX, 0x, and Kyber or the ability to borrow and lend stablecoins through platforms like dYdX and Compound, made stablecoins that much more powerful. Users could remain on-chain for a lot of their banking needs. We can see clearly that stablecoin issuance really took off in late 2018, right as many of DeFi's first primitives came to market. The amount of USDT tokenized on Ethereum has grown to over $6 billion USD from virtually 0. USDC has also seen astronomic growth, growing to over $1 billion market cap in less than two years. Decentralized exchange was another primitive that took off in 2019. With decentralized exchanges, smart contracts handle all parts of the exchange process - they verify that each holder owns the assets, that they approved the transfer, and once those are satisfied, the contracts atomically swap assets between the two counterparties. Again, it seems simple, but the traditional exchange process can be costly and exposes users to a lot of counterparty risk. As we have seen time and time again, exchanges can go down with all of their customers' crypto. Automated market makers took the decentralized exchange concept one step further by removing the need for a centralized market maker to quote both sides of the book. There are many reasons AMMs have been a breakthrough model for decentralized exchanges. First, it's extremely costly for token projects to engage market makers – the deals are very one-sided and concentrate too much influence in the market maker's hands. Second, it's expensive for market makers to provide liquidity on decentralized exchanges given the latency and cost of on-chain transactions. Through AMMs, projects can have liquidity from day one, making it much easier to bootstrap communities and networks. The last DeFi primitive worth mentioning is borrow and lend markets, more specifically, borrowing and lending directly from a smart contract. These systems allow anyone with idle assets to deposit them into a shared lending pool and anyone who wants to borrow assets to draw down from this pool in exchange for interest. Developers have been able to build powerful products by building a top these lending markets. For example, dYdX's lending markets power a global margin trading system - the ability for traders to earn interest helps bring more liquidity to the platform.Where is DeFi Going? - DeFi has just started to scratch the surface in terms of decentralizing the most important pillars of traditional finance. 2020 has been a watershed year for DeFi - the primitives noted above are being leveraged to create both products that rival traditional solutions as well as net new products that aren't available in today's system. The recent liquidity mining boom is actually an interesting play on yield generation. While most of the yields are a function of inflation rather than actual interest or cash flow, it's being offered at a time where most traditional banks are offering savings rates close  to 0%. Because of this, we're seeing a massive influx of capital into the ecosystem. Even if it's short term, this new capital helps fuel experimentation until something of value is found. Similarly, these protocols have intrinsic value via their cash flows. So even if the yields will collapse over time, they still have a floor that's much larger than anything offered in the traditional banking system. Decentralized exchange is also a vertical that will continue to grow in the short to medium term, and we expect them to surpass most centralized exchanges in the next few years. Already today, there have been numerous days in which trading on Uniswap has surpassed the trading on Gemini, Kraken, and even Coinbase. Developments like liquidity mining will boost the liquidity offered on decentralized exchanges to the point where traders will be able to exchange at a cheaper rate than they do on centralized exchanges, and without kyc. Additionally, decentralized exchanges are still in their v1.0 modes. At dYdX, we've worked hard to build margin trading and the very first synthetic  BTC perpetual swap, all on-chain so users never have to give up custody of their funds. In the next few months, we will also be launching our Layer 2 solution with Starkware, which will greatly reduce costs, increase throughput, and enable more trading pairs as well as the ability to cross-margin on our perpetual markets. Another area in which decentralized finance is subverting its centralized counterparts is lending. On-chain lending was always criticized for not being able to administer undercollateralized loans given the lack of legal recourse and identity, but this might change soon thanks to lending protocol Aave's new credit delegation design. Through their system, token holders will be able to stake their assets behind the credit reputation of another address (tying to a user), enabling that address to borrow funds without overcollateralizing the loan. If that user doesn't repay the loan, it is their staker that is punished, meaning token holders are incentivized to act in a way that doesn't hurt them, in effect helping ensure only creditworthy borrowers are able to take out uncollateralized loans. Lastly, the DeFi ecosystem has birthed its own insurance offerings, allowing users to buy protection against smart contract risk. One of the biggest barriers to adoption in the early days of DeFi was the lack of insurance. No traditional insurer would enter the space so ecosystem participants built their own solutions. Through protocols like Nexus Mutual and Opyn, DeFi users can secure their deposits without the need of a traditional bank or institution. All of the innovation happening in the DeFi ecosystem is affirming the fact that decentralized finance can create financial applications that are more desirable than those that exist in the traditional world. We're already seeing some DeFi projects overtake parts of the centralized crypto economy and it won't be long until this activity starts to overtake the traditional world.  There's never been more of a need for a financial system that's more fair, open, and efficient. At dYdX, we couldn't think of a more exciting mission to build towards.About dYdX We are working on launching additional Perpetual Contracts in the future, with the goal of making dYdX the go-to platform for trading a variety of cryptoassets across Spot, Margin, and Perpetuals. We are also actively building a Layer 2 solution with StarkWare to be able to offer an even better experience for our traders. If you'd like to get started with trading on our platform or have any other questions, please join our Discord and follow us on Twitter. Trade the ETH Perpetual now →




LINK-USD Perpetual Contract Market is Live

We are excited to announce that the LINK-USD Perpetual Contract Market is now live. Traders can trade LINK with up to 8x leverage with no expiry. Our contracts have been audited by Open Zeppelin, and are fully open-sourced. To celebrate the launch, we are providing 50% off trading fees on the LINK-USD Perpetual for the next 7 days. Perpetual Markets on dYdX are not available in the United States. No actual Fiat USD is supported on dYdX.Why LINK? On a daily volume basis, LINK is the most traded token in all of DeFi. While demand is unquestionably high for LINK, we are just as excited about the underlying oracle ecosystem that Chainlink has built. As such, we are excited to share we are using Chainlink's LINK-USD Price Feed as the oracle source for this market. Given that Chainlink's ecosystem of data providers have proven to be extremely reliable, even in times of high volatility, we are confident that this oracle integration will perform extremely well. Contract Specification Details for the LINK–USD perpetual market are provided below. General information and examples can be found in the Perpetual Guide. Details on the protocol and decentralization can be found here. Perpetual type: Linear, Underlying market: LINK–USD, Margin/settlement asset: USDC, Tick size: $0.005 USD, Min order size: 15 LINK, Quantity step: 0.000001 LINK, Max order size: None, Max position size: None, Expiry: Perpetual (no expiration), Maximum leverage: 8x, Initial margin requirement: 12.5%, Maintenance margin requirement: 10.0%, Interest rate component for funding: 0%, Impact notional amount for funding: $5000, Fees: -0.025% Maker, 0.15% Taker, Custom fees for 'small' orders: variable depending on gas cost, Min order size to place limit order: 1200 LINK, Mark price for liquidations: The mark price is the on-chain index price, given by the Chainlink LINK–USD Price Feed which reports a weighted median from seven market data aggregators., Funding: Funding payments are made every second according to a rate which is updated hourly. The funding premium is scaled so as to have a realization period of 8 hours., Contract loss mechanism: Deleveraging (centralized, but verifiable insurance fund is the first backstop before deleveraging), Trading hours: 24/7/365, What's Next? We are working on launching additional Perpetual Contracts in the future, with the goal of making dYdX the go-to platform for trading a variety of cryptoassets across Spot, Margin, and Perpetuals. We are also actively building a Layer 2 solution with StarkWare to be able to offer an even better experience for our traders. If you'd like to get started with trading on our platform or have any other questions, please join our Discord and follow us on Twitter. Trade the LINK Perpetual now →




dYdX Chooses Chainlink as its Oracle Provider for New Market

We are excited to announce the launch of a new Perpetual Contract market for LINK-USD which uses Chainlink's LINK/USD Price Reference Data feed as a reference price to determine on-chain liquidations. After performing extensive due diligence, we selected Chainlink's LINK/USD price oracle because it provides the highest quality price data, delivered by the largest and most decentralized group of independently run, Sybil-resistant oracles. Our users can also monitor the real-time health of the oracle via Chainlink's various monitoring resources, in order to gain insights into the oracle network as a whole, or the individual nodes and their on-chain responses. With Chainlink already securing over $2B USD value within DeFi, we are confident that Chainlink's oracle infrastructure is capable of supporting our LINK-USD Perpetual Contract-both now, and well into the future-even under the most adverse market conditions. Chainlink's price reference model is especially critical for helping us secure assets in more thinly traded markets, which can be reliably mitigated by its high-quality aggregated data feeds.What's Next? We are working on launching additional Perpetual Contracts to our platform, with the goal of making dYdX the go-to platform for trading a variety of cryptoassets across Spot, Margin, and Perpetuals. We are also actively building a Layer 2 solution with StarkWare to be able to offer an even better experience for our traders. If you'd like to get started with trading on our platform or have any other questions, please join our Discord and follow us on Twitter.About Chainlink If you're a developer and want to quickly get your application connected to Chainlink Price Reference Data, visit the developer documentation and join the technical discussion in Discord. If you want to schedule a call to discuss the integration more in-depth, reach out here. Chainlink is an open-source blockchain abstraction layer for building and running decentralized oracle networks that give your smart contract access to secure and reliable data inputs and outputs. It provides oracles to leading DeFi applications like Synthetix, Aave, and Kyber Network; numerous blockchains such as Ethereum, Polkadot, and Tezos; as well as large enterprises including Google, Oracle, and SWIFT. Website | Twitter | Reddit | YouTube | Telegram | Events | GitHub | Price Feeds | DeFi




Scaling dYdX with StarkWare

Partnering with StarkWare to scale decentralized trading dYdX is excited to announce a partnership with StarkWare. Our engineering teams are collaborating on a Layer 2 scaling solution for Perpetual Contracts, based on StarkWare's StarkEx scalability engine and dYdX's Perpetual smart contracts. Our Perpetual Contracts will be powered by StarkEx by the end of this year. To provide the best user experience for traders, we have decided to transition to Layer 2. Traders can expect significantly lower gas costs, and in turn, lower trading fees and minimum trade sizes. We remain committed to our mission of building open, secure, and powerful financial products. StarkWare is developing software to dramatically improve blockchain scalability by allowing any type of computation to move off-chain, using the Ethereum blockchain as a public immutable commitment layer. StarkWare's dYdX integration combines STARK proofs for data integrity with on-chain data availability to ensure a fully non-custodial protocol.What does this partnership mean for our traders?Significantly Reduced Gas & Trading Fees - Trades are submitted on-chain in ZK-Rollups, reducing the amount of gas required per-trade. We are able to pass on those savings to traders in the form of reduced trading fees across the board.Reduced Minimum Trade Sizes - Since there are smaller fees per-trade, we are able to offer smaller trade sizes, allowing traders to try out dYdX by starting with a smaller amount of capital.Cross-Margin - Traders will be able to trade on multiple Perpetual Contracts using a single margin account, allowing for dramatically increased capital efficiency while trading multiple pairs.More Trading Pairs - With cross margining and increased scalability, we will be able to launch many more trading pairs on dYdX. We will also be able to spin up new pairs faster, allowing traders to trade the tokens they want, when they want to.Instant Trade Settlement - Trades are matched off-chain and held in batches until the zero-knowledge rollup and proof are submitted on-chain. This prevents front-running of trade settlement and allows for instantaneous balance updates without waiting for a transaction to be mined. Trading on dYdX will feel every bit as fast as trading on a centralized exchange.More Performant Price Oracles - Prices are attested-to by oracles using STARK-compatible signatures, allowing prices to be used as soon as they are signed, rather than waiting for a transaction to be mined. This significantly increases the economic security of the system against flash crashes, and allows for real-time liquidations.Higher Leverage & Lower Liquidation Penalties - Given the performance improvements of the oracles, we will be able to offer lower margin requirements, which means both higher maximum leverage as well as lower penalties when liquidated.Start Trading Now - We are aiming to launch by the end of 2020. Until then, trade our BTC-USD and ETH-USD Perpetual Contracts for up to 10× leverage. Start trading here.About dYdX - dYdX is building open, secure, and powerful financial products accessible globally. Trade Spot, Margin, and Perpetual Markets, with up to 10× leverage. dYdX runs on audited smart contracts on Ethereum, and enables trading with no intermediaries. It allows traders to move quickly, while maintaining full control of their assets.About StarkWare - StarkWare develops ZKP technology to solve two of the biggest problems of blockchains: scalability and privacy. Focusing on scalability, StarkWare has the fastest in-class technology for asserting computational integrity via succinct, transparent, and post-quantum-secure proofs.




Comparing DeFi Token Models

IntroductionDeFi tokens have recently been far and away the best performing sector in the cryptocurrency markets. The primary reason they have seen such growth can be boiled down to a single factor: they accrue value. Most DeFi token models are designed in such a way where token holders benefit proportionally to network usage and growth. In fact, many of the most popular models operate similarly to traditional equity, in which holders value the asset based on the fees earned by the network as well as the ability to govern it. DeFi tokens also incorporate some form of incentive design to align the interests of the network with long term holders, staking being a popular example. While DeFi tokens have passed the initial value capture test, many of these models can be upgraded. Over time, more experiments will illuminate how to best capture value from a decentralized financial network through a token. The idea of using tokens to incentivize decentralized network growth isn't new. Fred Ehrsam's early blog post on the decentralized business model described how a token could be used to help solve the proverbial chicken and egg problem faced by networks and marketplaces. The problem with this early implementation was that there was no way to distinguish speculators from long term investors or users committed to the network. We saw this play out during the 2017 ICO bubble - tokens were sold off to speculators who quickly flipped them for a quick profit, leaving the actual networks completely behind. Since then, the industry has been able to experiment with token models designed to create multi-sided networks with long-term focused participants. DeFi in particular was a perfect breeding ground for this experimentation because the general utility of the sector like staking, lending, and borrowing meant that new users were joining networks, which created a larger sample set to test token incentives with. As a result of this experimentation, three distinct token models have emerged, but it's also very common for tokens to combine features. Fee Tokens (cash flows), Governance Tokens (governing rights), Collateral of Last Resort Tokens (system re-collateralization), Interestingly, many of the most successful tokens incorporate both functionalities. Many tokens also start off as governance tokens and then look to add in some type of fee capture only if token holders vote for and approve it. This also has implications around the regulatory classification for many of these tokens. Naturally, we can expect network participants to push for more value capture.Token ClassificationToday's DeFi Tokens Fee Tokens Fee tokens are tokens which have a cryptographically verifiable claim on fees generated by a DeFi protocol. Fees are typically baked into accessing and using the DeFi protocol - very similar to transaction fees charged by traditional financial service providers. These fees can be passed directly to the Ethereum address that holds the underlying fee token or into an omnibus wallet architecture. So far, fees have been distributed either in stablecoins, an underlying network token, or in ETH. In some instances, token holders can vote on how to use the fees accrued to them. In the case of Kyber Network, token holders can use their funds to buy back KNC on the open market and burn them out of the supply. Buy & burn's are a frequently used feature for deflationary DeFi tokens to accrue value. Fee tokens are a big step forward for DeFi token models because they can be valued on the basis of cash flow. This makes it easier for investors to reason about valuation relative to the various intangible factors used to value hard-capped, fixed issuance money assets like Bitcoin and Monero. Now, tokens can be valued on the basis of their future cash flow, and can be compared against one another to identify mispricing amongst projects building for similar use cases. Governance Tokens Governance tokens are those which give holders the ability to vote on how the project's underlying smart contracts function. The rationale behind the value of governance tokens is that a fully decentralized protocol shouldn't be owned by anyone. Token holders are intended to collectively own the set of contracts and to decide how they change over time. So far, DeFi tokens supporting governance have been used to vote on proposals around which assets are supported, collateralization levels for certain assets, and where protocol fees should be directed. For example, Compound has received an influx of new proposals recently for deciding how much value can be borrowed against certain assets. Over time, governance will shift towards deciding over how smart contracts are upgraded. This will be done programmatically: once a vote is confirmed, smart contracts can adapt without human intervention. To do this, developers would need to include finished code along with their proposals, so the smart contracts can automatically integrate it once voting is complete. Collateral of Last Resort Tokens Collateral of last resort tokens are tokens that act as backstops to a price peg that a DeFi protocol attempts to maintain. For protocols in which synthetic assets are created, there can be situations where there is not enough external collateral to restore the peg of a synthetic asset. In this case, the underlying network token can be used as a source of liquidity to buy and/or sell assets required to restore any peg. In exchanges for serving as the protocol's backstop, holders of collateral tokens are usually rewarded with a share of network fees. Two of the most prominent examples are MKR and MTA. MKR was the first token model to pioneer the collateral of last resort functionality. If for any reason the system becomes uncollateralized, MKR is sold on the open market to backstop the Dai supply. With MTA, if any of the stablecoins within its basket lose their peg, MTA can be sold to make sure stablecoin depositors are made whole. Staking and Inflation Two elements present in many DeFi token model implementations are staking and inflation. Staking is used to align holders with the long term interests of the protocol. Through staking, holders lock up their assets for the future, effectively removing them from the circulating supply so fewer tokens can be sold. More importantly, users often stake for the right to provide a service to other participants in the network. In exchange for providing this service, and in effect making the network more valuable, stakers are rewarded via inflation. The inflation funding model has proven to be quite successful for bootstrapping liquidity in the earlier days of a protocol. For example, Synthetix used inflation to incentivize stakers to create synthetic assets and then seed Uniswap with them so that there were liquid secondary markets. This culminated in the sETH pool being one of the most liquid places to trade ETH on Uniswap. Staking also has a particular effect on market structure, and whether or not it is beneficial is up for debate. In general, staking yields, and specifically high staking yields create negative pressure on liquidity, making it difficult for buyers and sellers to transact without having a large effect on the price. There are two reasons it dampens liquidity: Staking yields increase borrow costs, Holders are incentivized to stake and keep assets off exchange, High borrow costs make it difficult for market makers to acquire the inventory required for a two-sided market. The fees they can earn by providing liquidity can't outperform the fees required to compensate holders on their forgone stake, especially early on in a network's cycle when the inflation rate is highest. Similarly, high borrowing costs deter short sellers because their expected return would have to cover price depreciation and the staking yield. Given the recent price action of DeFi projects, it's very unlikely that many short sellers are going to play in this market. Another side effect of high staking rewards is that holders are somewhat disincentivized to keep their assets on exchange. Low liquidity can lead to high volatility, and in the case of many high promising DeFi tokens, it's upwards volatility. DeFi tokens that actually accrue value almost always have a bullish market structure because there are so few sellers. This makes DeFi tokens very convex - a great great example is SNX. Value Capture The most novel feature DeFi token models bring to the crypto space is the ability for a token to have intrinsic value. Prior to DeFi tokens, very few token models could be valued on any quantitative basis. The first generation of crypto assets in general weren't valued, they were priced, and market participants would primarily react to market structure and narratives. This fundamental gap in intrinsic value is what made the crypto markets so speculative and volatile. Once it was broadly discovered that those assets could only accrue value by having strong holders, exchanges launched pseudo equity tokens in which earned revenue was used to buy back and burn tokens, effectively mimicking a dividend. Exchange tokens were a bit flawed in that the buy and burn process was not transparent. Holders had no idea if purchases were being front run or if purchases were even happening at all. So far, exchange tokens leave much to be desired in terms of value accrual. With DeFi tokens, protocol fees directly accrue to token holders, so network value can be analyzed through basic frameworks like Discounted Cash Flow (DCF) at minimum. A valuation can be derived from forecasting out future network growth and then reasoning through what it should be worth today. Additionally, DeFi platforms are unique in that they usually need to bootstrap a supply side to sufficiently serve the demand side. To do this, many token models incorporate staking and inflation rewards (as mentioned above), which means holders are incentivized to keep tokens out of circulating, creating a dampening effect on selling, which in turn leads to greater value capture. DeFi tokens with purely governance capabilities are a bit different in terms of value capture. Based on first principles, the value of a governance token should equal the marginal cost to fork the network. DeFi networks are different in that forking the code doesn't necessarily mean you can fork all of the liquidity away, which is the defining moat within DeFi. Given this, the market is likely placing some premium on governance, even more so for completely community run projects like Yearn Finance. Since launching, Yearn has performed much better than COMP and BAL, two of the other most dominant governance tokens. (source: coingecko.com) Bootstrapping with Liquidity Mining Another area where DeFi tokens have really innovated is liquidity mining. As we mentioned in our latest edition of dYdX Trader Insights, liquidity mining is a novel way for DeFi protocols to bootstrap liquidity and build a user base. Liquidity mining is similar to Bitcoin mining in that protocol issues rewards to supply siders who provide work, or in the case of DeFi, liquidity, which makes the network more valuable for the demand side. It's this incentive that helps create the initial network effect. Even with liquidity mining being so new, it has been a success based on a number of early launches. Compound saw massive growth in deposits after it launched COMP liquidity mining, on the order of 400%. Similarly, Balancer's active users have skyrocketed since they announced BAL mining. Lastly, as has been the main talking point in the crypto markets over the last week, Yearn Finance saw astronomical growth in users and in total value locked on the back of their YFI token launch. Total value locked in Yearn's contracts have ballooned from just under $10 million USD to nearly $300 million USD in the span of a week, While  liquidity mining has clearly been an effective way to bootstrap growth, a lot of the activity is self-referential, meaning it's a lot of the existing DeFi money shuffling between the best yield opportunities, and also using DeFi protocols to obtain leverage. This doesn't mean that liquidity mining is unsustainable, but it's important to acknowledge two realities. First, users are locking up funds in these protocols for the most part because of the yield. If the liquidity mining opportunity wasn't available, it's much less likely for protocols to have this much value locked in them, which also affects their intrinsic value because they would be earning less fees. Second, since a lot of these liquidity mining opportunities are denominated in stablecoins, users are taking on leverage and using a portion of their rewards to pay off interest - in principle, a good trade, but it creates a lot of risk. The issue here is that in times of volatility, DeFi can be very fragile, and this leverage can be unwound quickly. Unfortunately, liquidity mining will likely grow leverage within the system, so it's important to be cognizant of the risk and discounting that when allocating capital to liquidity mining. Conclusion DeFi token models are a huge step forward for the crypto ecosystem for a number of reasons. First and foremost, DeFi tokens have intrinsic value via the on-chain fees they earn from the protocol. This makes it much easier for investors to coordinate around the value of these tokens rather than having to price tokens based on market structure and sentiment. Secondly, DeFi tokens are used as incentive mechanisms so that network participants act in ways that reinforce a protocol's network effects. In DeFi, tokens are mainly used to incentivize liquidity, for which early contributors can earn very high yields. Based on a number of new launches, these liquidity incentives seem to have a very meaningful impact on network effects. Luckily, we are still at the precipice of DeFi token experimentation. The initial uses - fees, governance, re-collateralization - are strong uses of a token, but we believe the stage is set for even more innovative uses. As DeFi networks grow, new token use cases will be implemented to maintain many of the network effects being created today. If you'd like to get started with trading on our platform or have any other questions, please join our Discord and follow us on Twitter. Trade on dYdX now →




ETH-USD Perpetual Contract Market is Live

After listening to our active trading community and evaluating the greater DeFi product landscape, we are pleased to announce that we have launched an ETH-USD Inverse Perpetual Contract Market.   To celebrate the launch, we are providing 50% off trading fees on the ETH-USD Perpetual for the next 7 days. Now, dYdX traders can trade ETH with increased leverage (up to 10x), while using ETH as collateral. Similarly to our BTC Perpetual, ETH-USD will have no expiry. Our contracts have been audited by Open Zeppelin and can be viewed here. Perpetual Markets on dYdX are not available in the United States. No actual Fiat USD is supported on dYdX.Why an Inverse Perpetual? An inverse perpetual contract is one that is quoted in USD but margined and settled in the base asset -- in this case ETH. The benefit of this type of contract is that users do not have to take on any stablecoin exposure, and can use ETH that they likely already hold to trade with. Traders can now obtain leveraged long or short exposure to ETH while using ETH as collateral and earning returns in ETH.  Why ETH? While ETH is the underpinning of the DeFi ecosystem, there are currently only a few simple ways to gain ETH leverage in both an efficient and decentralized manner. With our Perpetual, users can ensure that they remain in control of their ETH while gaining increased leverage and trading on the most liquid orderbooks in DeFi. Contract Specification Details for the ETH–USD perpetual market are provided below. The market otherwise operates identically to the BTC–USD perpetual. General information and examples can be found in the Perpetual Guide. Details on the protocol and decentralization can be found here. Perpetual type: Inverse, Underlying market: ETH–USD, Margin/settlement asset: ETH, Tick size: $0.10 USD, Min order size: $200 USD. Order sizes below $1,500 must be either market orders or fill-or-kill orders, Quantity step: $1 USD, Max order size: None, Max position size: None, Expiry: Perpetual (no expiration), Maximum leverage: 10x, Initial margin requirement: 10%, Maintenance margin requirement: 7.5%, Fees: -0.025% Maker, 0.075% Taker, Custom fees for 'small' orders: 1% Taker, Min order size to avoid 'small' order fees: $1500 USD, Mark price for liquidations: The mark price is the on-chain index price, given by the MakerDAO ETH–USD Oracle V2 which reports the median spot price of six exchanges: Binance, Bitfinex, Bitstamp, Coinbase Pro, Gemini, and Kraken., Funding: Funding payments are made every second according to a rate which is updated hourly. The funding premium is scaled so as to have a realization period of 8 hours., Contract loss mechanism: Deleveraging (centralized, but verifiable insurance fund is the first backstop before deleveraging), Trading hours: 24/7/365, What's next? We are working on launching more perpetuals in the future, with the goal of making dYdX the go-to platform for trading a variety of cryptoassets across Spot, Margin, and Perpetuals. If you'd like to get started with trading on our platform or have any other questions, please join our Discord and follow us on Twitter. Trade the perpetual now →




Trader Insights: Yield Farming

This is episode #02 of Trader Insights, a series on trends & strategies for trading cryptocurrency.A new way to build network effects and liquidity in crypto One of the earliest beliefs within the Ethereum community was that native tokens were an excellent way to bootstrap network effects. While the idea of early network users owning equity was powerful, the actual implementation was blown out of proportion during the 2017 ICO boom. During that time, token holders were much more focused on speculation than building the underlying network. More recently, decentralized finance protocols have been using new token incentives to drive liquidity and users to their platforms. Formally dubbed 'liquidity mining,' decentralized finance protocols have been designed to reward their users with native token that can be used as both a cash flow and governance asset. The first decentralized finance protocol to utilize liquidity mining was Synthetix. SNX holders that turned their sUSD into sETH and contributed to the Uniswap sETH pool were rewarded with more SNX. The experiment was successful - sETH became one of the most liquid assets on Uniswap. Compound's most recent COMP launch was the next protocol to launch liquidity mining, and based on early indications, it has been a massive success. When COMP first launched, the protocol had roughly $100 million USD in assets locked in the protocol. Now, the protocol boasts nearly $1 billion USD in locked assets, just two weeks after launch. It's clear that liquidity mining is a great way to bootstrap network effects, which for decentralized finance protocols means liquidity. Diving into Compound's numbers post COMP launch, over 2,000 unique suppliers and over 800 unique borrowers have been collecting COMP daily.Source: duneanalytics.comSource: duneanalytics.com In terms of unique users, the COMP launch increased total uniques from 30,000 to 40,000, over 30% increase in two weeks. When comparing Compound's unique user growth with the DeFi more broadly, it's clear that liquidity mining through COMP was an effective way of growing users. Source: duneanalytics.comSource: duneanalytics.com An important aspect of liquidity mining is that it gives decentralized finance protocols a way to compete with larger centralized platforms. For one, liquidity mining can actually pull idle assets out of exchanges and into DeFi protocols. Assuming those idle assets aren't earning any interest, liquidity mining is extremely competitive to centralized exchanges. Second, liquidity mining drastically reduces the costs associated with spinning up new maker/taker books. Decentralized finance protocols using liquidity mining can be much more efficient than centralized venues in going to market with new products quicker. Liquidity mining also won't be unique to a single DeFi protocol. Soon after COMP launched, Balancer protocol began its BAL mining incentive program. Similarly, Synthetix announced a liquidity mining partnership with REN protocol and Curve to build liquidity for tokenized representations of BTC on Ethereum. Given the success of these launches, it's very likely we may see a liquidity mining boom in the same spirit as the 2017 token boom. While liquidity mining induced growth is good for DeFi protocols, nothing ever lasts forever. It's no surprise that users and assets grew as the underlying price of COMP increased. If Coinbase never announced their intention to support COMP, it's unclear just how high user growth and total value locked would have reached. It's important to distinguish network growth that's strictly tied to speculating on the underlying token rather than users wanting to accumulate the token over the long term.Market Roundup A prolonged low volatility regime: Both BTC and ETH vols have been muted since the halving. This makes sense given the hype around the event, but both BTC and ETH have remained silent in the face of new fundamental catalysts. Even more unique, ETH implied volatility has fallen below BTC implied volatility. Given ETH has historically been much more volatile than BTC, this has caught a lot of the trading community off guard. Source: skew.comSource: skew.com There's a couple of reasons for this low vol regime. First, miners have likely been more active hedgers since the halving - working with finance firms who build them structured products to offset risk and capture yield. Many of these products involve some form of yield harvesting that comes from selling volatility. Second, an interesting theory shared by Genesis Volatility is that a lot of the ICO projects with large ETH treasuries have been monetizing their holdings by selling volatility. Regardless of what's causing such low volatility, historically, volatility has spent little time at these levels. DeFi derivatives: Derivatives exchange FTX has launched a number of new DeFi focused trading products. The big release was a new DeFi index comprising a number of the highest market cap assets. This came after a secular DeFi uptrend which we discussed in our previous issue of dYdX Trader Insights. Along with the DeFi index came individual markets for COMP and BAL. A week after launch, the DeFi market has roughly $1 million USD worth of open interest, while COMP and BAL have $3.5 million and $250k in open interest respectively. Not surprisingly, all of the associated perpetual markets have a negative funding rate, indicating there is more short interest than long interest. Performance wise, the DeFi index has come down a bit, but is still trading much higher from its launch price.Source: tradingview.com The return of decentralized betting: The crypto ecosystem has long fantasized about truly decentralized betting markets. Over the coming weeks, two DeFi protocols, Synthetix and Augur will be launching betting markets. Synthetix is unique in that they're releasing parimutuel binary options. These markets allow speculators to trade events based on binary outcomes. For example, will BTC trade above $10k on or before July 31st 2020? Augur, on the other hand, aims to be a more robust no-limits betting platform where any arbitrary market can be created. This is an exciting space to watch and we're expecting strong volumes for their respective launches.First DerivativeDaily volume for our DAI-USDC market.Daily volume for our ETH-DAI market.Daily volume for our ETH-USDC market.Daily volume for our BTC-USD Perpetual market.The funding rate for the BTC-USD Perpetual market.Buys vs. Sells vs. Price for the BTC-USD Perpetual market.Second Derivative Over the last two weeks, we saw the most flow in ETH<>USDC, with DAI<>USDC being a close second. Liquidity has improved on our ETH<>USDC so that most likely became our preferred venue to get ETH exposure. Based on everything happening with yield farming, we attribute the increase in DAI<>USDC volume to users swapping stablecoins so they can capture various yield opportunities. BTC volatility has remained low for quite some time, but we saw much more selling than buying on the BTC<>USDC perpetual. This is in line with BTC's price decline and we're also seeing more delt neutral traders on our swap that are collecting funding. More delta neutral swap traders is also evident by the drop in the perpetual's funding rate, moving from just at 40% apr down to -10% apr by the end of the two week period.Around the Open Financial System Curve DAO spec goes live Curve Finance released a formal spec of their CRV governance token and the Aragon DAO it will govern. Also included in the whitepaper is an overview of how votes will be weighted in the DAO. Curve's system is unique in that votes are weighted both by total stake, but also for how long CRV tokens are stored in time-locked contracts. Curve is the first DeFi protocol to require governance participants to time-lock their tokens., USDT surpasses $10 billion in total market  cap Tether continued its ascent as the cryptodollarization trend captures more of the crypto market cap. As we discussed in our piece on crypto dollar yields, stablecoins are the center pieces to a whole new class of financial instruments and most importantly, these instruments allow their holders to earn dollar yields not available in the traditional world. This most recent spike in issuance has been a direct result of DeFi offering these large yields., Balance's $500k vulnerability A vulnerability was found in Balancer Protocol shortly after it launched in which an attacker could use a flash loan and then trade that principle within a specific token pool. In this specific exploit, an attacker actually borrowed funds from our exchange and then traded within the STA/STONK pool, manipulating the price of the pool so that they could swap assets at a much cheaper price., We wrote about our integration with Curve Finance We released a tweet thread that went into a bit more depth about our recent integration with Curve finance. We're excited about it for a couple of reasons. For one, by utilizing Curve, we're giving our users the most liquid way to access stablecoin liquidity. Second, using Curve is a much more seamless user experience compared to swapping between stablecoins across fragmented DEXs., dYdX is the most powerful open trading platform for crypto assets with spot, margin, and perpetual markets. Start trading on dYdX today and check out our new BTC-USDC Perpetual Market! You can reach dYdX via email at contact@dydx.exchange, on Twitter, or on our official Discord.




Trader Spotlight: Andrew Kang

This is episode #02 of Trader Spotlight, a series on trading insights & strategies used by well-known cryptocurrency investors. On May 14th, we hosted a live AMA Spotlight with Andrew Kang. Andrew has a wealth of expertise in crypto through prop trading, venture investing, mining, and more. He has his hands in almost every corner of the crypto markets! In these AMA spotlights, our goal is to bring you the best insights and commentary from professional crypto traders, market makers, and leading industry experts! Below is a recap of the AMA with Andrew Kang.To get started, we'd love to hear a quick background about yourself. What got you into crypto, investing, and trading? When did you have the "aha" moment? Would love to hear your story. For crypto, my first real exposure was probably in 2013. It was around the point when Dogecoin first started and it was blowing up on Reddit which I frequented. The fervor around Dogecoin was real and what was interesting was that a "Dogecoinmarkets" subreddit where people bought Dogecoin OTC also emerged. The thing was that people were bidding 2x-3x over market price since most didn't have access to coinbase/onramps. I didn't either at the time, and Coinbase applications were taking days/weeks to approve + long banking transfers, so what I did was find a sketchy website that accepted credit cards + instant BTC purchases to start arbitraging the Dogecoin BTC markets. Made maybe $5k in a two weeks which was a lot for me at the time in college until the arb started to go awayWhat do you make of the difference in markets between the American and Asian lately? What is causing the divide between one being a buyer and one a seller? Asia is such a big market and I think all of the countries have their own different sentiments, but I'll focus on China which is the largest. From my friends there, the sentiment seemed to be bearish/neutral on this entire runup. Many miners and traders got really wrecked on Black Thursday, so they weren't sure there would be new buyers in this market. America seems to really start to pick up on BTC as a SOV and the Paul Tudor Jones news is resonating a lot. Also, I'll say that it's interesting that Okex and Huobi futures curves have consistently been more backwardated. My suspicion is that miners are now being a lot smarter about hedging than previously as black thursday was a huge slap in the face, but haven't validated this widely yetThoughts on the taxonomy of DeFi trading instruments? Do borrowing, options, perps, etc all exist in parallel? Who eats whose lunch and how much? The markets are definitely related to each other and there are going to be traders out there that interact with all 3. For those, we are going to be constantly reevaluating what trades offer the best yield, and where the best R/R trade is if directional. Borrowing rates are usually a reflection of the opportunities in the futures markets for basis trades.What're the main differences between traders in the east and traders in the west? Are some products more or less popular? Any differences in mindset? Good question. I'm not sure I am the best person to answer this as I know there are a ton of trading funds in deep China that pop up all the time and most of us have never heard of. Many of which are trading with sizable capital. I think generally they use a lot more leverage. I know of two western funds that blew up on Black Thursday, but many more large punters in China that blew up then. A lot of the same analytics products are popular with them! I see skew, tradinglite, etc. screenshots whenever I pop into those chinese wechat groups. Where do you see tokenized BTC on ETH's chain (like wbtc), by the end of the year? I'm most bullish on wBTC out of all the tokenized BTC projects. The reason is that trust minimized projects like renBTC & tBTC aren't economically scalable. imBTC seems to have less friction in scaling than wBTC, but it's going to be a lot harder for western projects & players to trust asian projects. Tokenlon (imBTC parent) isn't as well known or trusted as BitGo (wBTC custodian) for most. Converting from BTC to wBTC has a lot of friction right now - it took like 1 hour + a lot of fees + slippage last time I did it, but a lot of projects like Ren & Thorchain have apps in development to turn this into a 1 step process which will alleviate a lot of friction. https://twitter.com/Rewkang/status/1259513120969506817 You can read more about my thoughts on the tradeoffs of different tokenized BTC projects here: https://twitter.com/Rewkang/status/1252582359934726145 Also what's interesting is that the supply of wBTC pretty much doubled in one day on May 13th.Source: DeFi PulseCan you provide any color on who might be depositing USD to buy USDT? There's been a crazy surge recently, mostly originating from Asia perhaps. Are these OTC desks, miners, hedge funds, businesses? Use-cases? Any hypotheses? USDT supply has definitely been exploding. I think generally it's the arbitrageurs (including OTC desks) and not the holders/users of USDT that are doing the actual depositing. Combination of OTC desk, miners, businesses, and normal people. In Asia, you see USDT being used for cross border remittance alot, and even some traditional import/export businesses are making it a standard part of their business. Main advantages are faster & cheaper remittance, and also tax evasion for some businesses in Asia. I use USDT & USDC in everyday life. Financed a hand sanitizer bottle manufacturing business opportunity in Indonesia by sending USDT and having a local OTC desk convert to IDR. Invested in a US based Biotech by sending USDC to VC friend that led the dealWhy don't we see enough adoption in the Asian market for DeFi? Lack of translations? Reluctance to custody one's own funds? The excitement over DeFi is growing pretty quickly. Hard for many of us to see since sites like DeFipulse.com tend not to track asian defi projects. dForce was $20M+ TLV before the exploit, imBTC almost overtook wBTC a few months back, and I remember Rune Christiansen even saying that China was surprisingly their largest market for CDPs when they did analysis on web traffic data. Tokenion DEX (on imToken) gets some substantial volume from what I remember - surpassing many DEX's we've heard of in the west.If you were to allocate a portion of your portfolio towards optimizing for crypto dollar yields, which platforms and strategies would you focus on? I think perps will still be dominant and their volumes will grow since delta = 1 is just easy to understand, but options definitely have a lot more room to grow. In legacy finance, options:futures volume is something like 2:3 and in crypto, options volume is only low single digits % of futures/perpsWhat market making opportunities do you see in dYdX? Do you see market makers providing liquidity across multiple DEXes or do they tend to focus on one or two? From the market makers I've tracked, it looks like they are market making across multiple DEX's. E.g. Oasis in addition to dYdX. The books are obviously not as liquid as CEX's and the infra to market make is not as easy to set up yet and the whole DeFi thing is still relatively new compared to Crypto CeFi. Whenever a market is new & inefficient, there's opportunity. Even some of the older DEX's that have OK volume still have really wide spreads.Would love to get your thoughts on what kind of token models and growth hacks you have seen as effective for bootstrapping liquidity/early users. Generating value for token holders while bootstrapping network growth is definitely the most important balance to strike for token projects. I think previously you saw a lot of token models detract from the network more than they added to it, but models these days are getting a lot better. What's interesting are the token models that essentially provide subsidies via token inflation for network participants that contribute positively and where their actions result in network effects. E.g. Kava & Synthetix. Synthetix sETH pool becoming the largest Uniswap pool (1/3 of total Uniswap TLV at one point) is a testament to the effectiveness of the model. Made it 100x easier for people to go in and out of synths.How large really is the market for those who want decentralized exchange infra? How would you respond to the argument that DeFi isn't really innovative and is just rebuilding the traditional financial system on crypto rails? I think the two important factors that DeFi has over CeFi is: 1. Composability 2. Regulatory Arbitrage People tend to focus on self custodial finance as something really important, but I think that's overplayed and the market for that is small. Projects whose only differentiator is the self custody aspect have generally failed to get any traction. The fact that these decentralized financial systems are able to interact with each other using the same database allows for a lot of interesting things though. For say JP Morgan & Apple to collaborate on a financial product, it's extremely friction heavy, but is seamless in DeFi. Regulatory arbitrage is also huge. And will be even more important when regulators crack down harder on crypto exchanges. It's why Bitmex, deribit, etc. have started to be more restrictive recently. Right now, its difficult for most US people to trade crypto options for example, but they could always use DeFi apps as a get around.How does contango/backwardation affect your trading strategies? From a directional trading standpoint, deep contango or backwardation is one of the indicators that can tell us if we're overextended or not in one direction. There are a lot of yield generating strategies you can take advantage of when curves are in contango/backwardation. Do you think USD Tether should be supported more in DeFi? This will probably make some people mad, but yes. It's an order of magnitude more liquid than USDC/DAI and there's obviously demand for it. Look at how quickly the USDT pools in Aave and Curve grew once they were added and that's all you need to know about the demandWhat's better... a 30% return in a bull market or a 30% return in a bear market? 30% in a bear - the majority of people aren't generating any returns in a bear. But bull/bear markets are starting to look less like past ones (i.e. black thursday) since we are seeing a secular change in crypto markets in general, so be careful out there! dYdX is the most powerful open trading platform for crypto assets with spot, margin, and perpetual markets. Start trading on dYdX today and check out our new BTC-USDC Perpetual Market! You can reach dYdX via email at contact@dydx.exchange, on Twitter, or on our official Discord.




  DYDX NEWS


dYdX Confirms Blocking Accounts Linked to Tornado Cash

    Just days after the US Office of Foreign Assets Control (OFAC) barred American citizens from transacting with Tornado Cash, dYdX has revealed blocking accounts that had previously engaged with the coin mixer. To comply with the new sanctions set by the OFAC, dYdX observed a significant increase in accounts flagged by one of its compliance vendors that were subsequently blocked. It cited that a certain portion of the funds in these account wallets had, in some way, interacted with Tornado Cash. dYdX's Response In its official blog post, dYdX maintained that the platform cannot seize customer funds. The ultimate custody of finds will remain at the hands of the users, who are free to withdraw at any given point. However, dYdX does have the ability to deploy their accounts in 'close-only' mode on its hosted matching engine. It also clarified that many account holders that were banned in the process may have never even directly engaged with the now sanctioned coin mixing solution. dYdX has tweaked its compliance policies and unblocked certain accounts. Moving forward, the platform said it will work towards limiting flagging while monitoring this issue. Emotions Running High The recent compliance requirements have forced several platforms to take drastic measures. Ethereum infrastructure provider Alchemy obstructs users of Tornado Cash from accessing its nodes. Infura also followed suit by blocking remote procedure call (RPC) requests to it. GitHub, for one, has courted controversy... read More



Ethereum dYdX Will Launch Standalone Blockchain On Cosmos, Token Jumps 1...

    Ethereum-based decentralized trading platform dYdX will be deployed as an independent blockchain on the Cosmos ecosystem. In the meantime, larger cryptocurrencies are facing hurdles and could continue to consolidate around their current levels. DYDX is in a downtrend on a 4-hour chart. Source: DYDXUSDT Tradingview The standalone blockchain is part of this platform’s fourth iteration, dYdX v4. The team behind the project expects to 'open source dYdX V4 by the end of 2022” but, as they clarified, this iteration will provide “critical” improvements so it will “require months of heads-down development”. The team behind the Ethereum-based trading platform picked Cosmos and its Proof-of-Stake (PoS) Tendermint consensus because of its security, decentralization, customizability, cross-chain capacities, and leverage its scalability. Thus, the platform will be able to process more transactions, and potentially increase its market share, amount of users, and trading volume while moving to its next development stage: full decentralization. The team behind the project said: The main requirement for the V4 protocol is full decentralization. The decentralization of a system is equal to the decentralization of its least decentralized component. This means that every part of V4 needs to be decentralized while also remaining performant. The ultimate objective, according to the announcement, is to make dYdX “one of the largest exchanges in all of the ... read More



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