Dydx: everything you need to know about DYDX

What is Dydx?

Dydx (DYDX) is a decentralized trading platform that offers margin trading and derivatives trading. The platform is built on Ethereum and allows users to trade a wide range of crypto assets with leverage of up to 10x. It also provides a fully decentralized exchange (DEX) where users can trade directly with their own wallets. With a focus on user control and transparency, Dydx has gained the attention of both retail and institutional investors and has rapidly gained popularity since its launch in 2019. 

How does Dydx work?

Dydx operates as a decentralized exchange platform with advanced derivatives trading, high decentralization, user governance, low fees, high leverage, and integration with the DeFi ecosystem. Dydx allows users to trade advanced derivatives in a flexible and customizable manner while retaining full control over their funds and positions. Due to its low fees and integration with DeFi protocols, Dydx also offers users the ability to reduce their transaction costs and benefit from other DeFi applications.

The DYDX token

The DYDX token is a utility token and the native token of the Dydx protocol, used for paying transaction fees and for voting on governance proposals. 

The total supply of DYDX tokens is limited to 1 billion, with approximately 50% released through a public sale and an initial token offering (ITO). The remaining supply is allocated to the project's team, investors, advisors, and community development. The team has announced its intention to continue issuing tokens as rewards to users contributing to liquidity and platform development. Additionally, the team will use a portion of the tokens for development and operational expenses. 

DYDX token holders have a say in the future direction of the protocol and can potentially benefit from any increases in the token's value.

The Technology Behind DYDX

DYDX is built on the Ethereum blockchain and is powered by smart contracts. The protocol uses the 0x protocol standard and has custom smart contracts specifically designed for advanced derivatives trading. Dydx's order book is also maintained on the Ethereum blockchain, and all transactions are public and transparent. 

Dydx also has an order book relayer, an off-chain service that processes and relays trading order data, improving transaction speed. The protocol supports various types of advanced derivatives trading, such as margin trading, perpetual swaps, and options, providing traders with a high degree of customization and flexibility. 

The Dydx protocol is designed with an emphasis on self-custody and risk minimization. Users have full control over their funds and positions and can make withdrawals without restrictions at any time. The protocol also incorporates multiple layers of security, including smart contract audits and an insurance fund that provides protection against losses due to unforeseen events.

The Dydx ecosystem

he Dydx ecosystem consists of several components that contribute to the functionality and growth of the protocol: 

• The trading protocol: the centerpiece of the Dydx ecosystem, allowing users to trade advanced derivatives such as options and futures with a high degree of customization and flexibility. The protocol is fully decentralized and operates on the Ethereum blockchain. 
• The order book relayer: an off-chain service that processes and relays trading order data, improving transaction speed. 
• The DYDX token: the native utility token of the Dydx protocol, used for paying transaction fees and voting on governance proposals. 
• Integration with various DeFi protocols, including Compound and Aave, enabling users to deposit their crypto assets and earn yields on their holdings. 
• Third-party tools and services developed to facilitate the use of the Dydx protocol, such as wallets and trading interfaces. 
• The Dydx Foundation: the organization behind the Dydx protocol, responsible for its development and growth. The foundation collaborates with partners and developers to further enhance and expand the protocol. 

Benefits of Dydx

What are the advantages of trading DYDX? 

• Full user control 
• Flexible options for personal strategies 
• Leverage options 
• Low trading fees 
• High level of privacy 

Drawbacks of Dydx

DYDX also has areas for improvement. What are the disadvantages of DYDX? 

• Relatively limited trading pairs 
• No fiat on-ramp 
• Fluctuating yield rates 

Who is the founder of Dydx?

The founder of Dydx is Antonio Juliano, an American software engineer. After earning a degree in computer science from Princeton University in 2015, Antonio began working as a software engineer at Coinbase, where he learned about cryptocurrency and the blockchain space. 

He soon saw the value in building something on Ethereum that could bring innovation to the DeFi sector. Thus, he started working on dYdX, taking inspiration from decentralized spot exchanges like Kyber and Ox and adding derivatives to the mix. dYdX was launched in 2017, and it quickly became one of the fastest-growing decentralized exchanges internationally. 

The rest of the DYdX team collectively has experience at companies such as Google, Bloomberg, Amazon, NerdWallet, Lyft, Facebook, and others.

Price forecasts

In 2026 experts expect a minimal price of €6.35 and a minimal price of €21.10 in 2031.