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What is dYdX (ethDYDX) (ETHDYDX)?
dYdX (ethDYDX) basic info
Cryptocurrency dYdX has emerged as a revolutionary platform in the world of decentralized finance (DeFi). Its key features and unique offerings have made it a popular choice among crypto enthusiasts. One of the notable features of dYdX is its ability to allow users to trade, lend, and borrow various cryptocurrencies without the need for intermediaries. This decentralized approach ensures that users have full control over their funds and transactions, eliminating the need for trust in a centralized authority. dYdX operates on the Ethereum blockchain, leveraging smart contracts to execute trades and enable lending and borrowing activities. This provides users with a transparent and secure environment for their transactions. One of the biggest advantages of using dYdX is its ability to offer margin trading. Margin trading allows users to amplify their potential gains by borrowing funds to trade with a higher leverage ratio. However, it is important to note that margin trading also carries higher risks, as losses can be magnified. In addition to margin trading, dYdX also supports perpetual contracts. Perpetual contracts are similar to traditional futures contracts, but with no expiry date. This allows users to trade assets without the need to worry about contract expiration. Another key feature of dYdX is its integration with various decentralized liquidity protocols. By tapping into liquidity pools such as on-chain decentralized exchanges, dYdX ensures users can access a wide range of trading pairs and competitive pricing. To ensure the security of user funds, dYdX employs advanced security measures such as multi-signature wallets, cold storage, and audits to minimize the risk of hacks or breaches. Overall, dYdX is a significant player in the DeFi space, offering users the ability to trade, lend, and borrow cryptocurrencies in a decentralized and secure manner. Its unique features, including margin trading and perpetual contracts, have attracted a growing user base seeking innovative ways to engage with the crypto market.
ETHDYDX supply and tokenomics
Uniqueness
dYdX is a cryptocurrency exchange that combines advanced financial tools with decentralization. The platform supports margin trading — a financial product enabling investors to increase their exposure to digital assets through leverage . dYdX’s isolated margin allows users to assign particular funds in the account as part of a trade, while cross-margin utilizes all the assets a trader keeps on the platform. Perpetuals — a type of futures contract that does not have a predetermined selling date, is also available for trading on dYdX. The exchange currently offers a maximum of 20x leverage on synthetic assets.
dYdX Layer 2 increases scalability of the network through use of a form of zero-knowledge rollup — zkSTARKS. The technology receives proofs, while validating a batch of transactions off-chain. These proofs are then sent back to the blockchain, where they are verified by a smart contract. zkSTARKS makes it possible to remove expensive computations from the mainnet with no sacrifices in decentralization.
Together, with trading and liquidity provider rewards, dYdX introduces retroactive mining benefits, allowing the platform to show appreciation to historical users and incentivize them to trade on layer 2 protocol.
Token utility
$DYDX was launched on Aug 3rd, 2021, and there are 1 billion $DYDX minted in the beginning in total. Holders of $DYDX on dYdX can stake tokens to the Secure Module to mint $stkDYDX. $stkDYDX has the same proposal and voting rights as $DYDX in terms of governance. The security module is primarily used to incentivize holders to properly govern the protocol, and act as a risk manager in the system at the same time. As an incentive reward, 2.5% of the initial supply of $DYDX is allocated to users who stake $DYDX according to the fees generated by user transactions and the percentage of open interests. In addition, 7.5% and 25% of the initial token supply are also used for liquidity provider rewards and trading rewards to incentivize their participation in trading activities on dYdX.
The initial supply will follow a 5-year release schedule and after 5 years, $DYDX will follow a <2% annual inflation rate to increase the total supply.
- 250M $DYDX (25%) as trading rewards
- 75M $DYDX (7.5%) airdropped to past users
- 75M $DYDX (7.5%) as liquidity providing rewards
- 50M $DYDX (5%) to treasury
- 25M $DYDX (2.5%) as USDC staking pool reward, but after DIP14 the pool was shut down and the remaining was moved to treasury
- 25M $DYDX (2.5%) to $DYDX staking pool as rewards
- 277M $DYDX (27.73%) to past investors
- 152M $DYDX (15.25%) to the team
- 70M $DYDX (7%) to future employees
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What is the development prospect and future value of ETHDYDX?
The market value of ETHDYDX currently stands at $208.85M, and its market ranking is #195. The value of ETHDYDX is widely recognized by the market. When the bull market comes, the market value of ETHDYDX will likely continue to increase.
Moreover, if ETHDYDX can play a greater role in practical applications, such as dYdX (ethDYDX) builders fully leveraging the potential of ETHDYDX, partnering with more businesses, and increasing its user base, the long-term value of ETHDYDX will be significantly enhanced.