The DEX was designed specifically for perpetual swaps and works differently than other DEXs such as Uniswap.
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The continued maturity of the crypto market has led to a positive feedback loop between the market and its participants. As new participants enter the market, the market has matured, leading to new crypto platforms and products to invest with.
No other sector in crypto has experienced this positive feedback loop like (DeFi). Increased adoption from both retail and institutional investors has led to a robust financial ecosystem with new, more advanced methods of DeFi trading.
If you are looking for a platform for more advanced DeFi trading methods, then youâve probably come across dYdX. The decentralized platform for was founded by ex-Coinbase and Uber developer Antonio Juliano and has been including a16z, Polychain Capital, Hashed, Spartan Group and others. For a brief moment, the popularity of dYdX even gave the platform .
In this article, weâll take a look at what dYdX is and how to get started on the platform.
is a (DEX), currently based on the Ethereum StarkWare. The platform utilizes zero-knowledge proofs (ZK) to create a more secure, decentralized and privacy-focused platform.
In June 2022, dYdX plans to leave Ethereum, replacing its StarkWare-based platform in favor of its own -based blockchain. DYdXâs founder stated that the move to the Cosmos ecosystem will provide a better user experience through customizable fee structures and transaction fees. The is set to feature a decentralized, off-chain order book capable of scaling alongside the platformâs continued growth.
While dYdX offers a DEX similar to or , dYdX was designed to trade a specific type of asset: perpetuals. Short for , perpetuals are essentially a , or financial instrument that derives its value from an underlying asset. Like futures or options, perpetuals provide an opportunity for traders to speculate on the future value of an asset. Unlike futures or options, perpetual swaps do not have expiration dates, hence the âperpetualâ nature of the contracts.
Unlike Uniswap or other DEXs, dYdX does not rely on an (AMM) to facilitate trading. Instead, the platform utilizes a traditional to meet the requirements and expectations of institutional traders. Despite the niche trading style of dYdX, the platformâs acceptance of institutional and retail traders has made it one of the more popular exchanges on the market. At the time of writing, dYdX has nearly in (TVL).
Before diving into how to get going on dYdX, itâs important to note that perpetual trading isnât available for everyone. Specifically, trading perpetuals are not available for anyone who is a resident or currently located in the United States. For more information on whether you can access the dYdX platform, make sure to check out the .
With that in mind, to get started on dYdX youâll first need to find the right for you. is the most popular wallet dYdX but you can also use Coinbase Wallet, a hardware wallet like Ledger or Trezor, or any wallet that uses WalletConnect such as .
Once youâve finished setting up your preferred wallet, youâll need to fund it with (ETH) if you donât hold any, in order to pay gas fees for transactions.
Now that your wallet is ready to go, you can access the dYdX platform. To trade perpetuals and interact with dYdXâs decentralized application () you can either connect your wallet to the desktop application or through the .
Finally, while not a requirement to use the platform, if youâre interested in being a part of the governance and evolution of the exchange you can buy dYdXâs token, also called dYdX. In late 2021, dYdX for its native token. Holders of the dYdX token can vote on governance proposals and based on token holdings.