dYdX, a decentralized exchange (DEX), lets cryptocurrency traders access perpetuals, which are a form of derivative. A derivative is a financial product whose price is determined by the value of another asset, and derivatives in the cryptocurrency market take value from the prices of various cryptocurrencies. Using your Ethereum wallet as your dYdX account, you trade futures linked to cryptocurrencies including Bitcoin, Ethereum, Solana, Doge, Avalanche, and others.
This platform is on fire, and it’s worth warming your trading paws at the blaze. On two days in late September, dYdX recorded a trading volume of $19 billion in crypto transactions in contrast with Coinbase Global Inc. (NASDAQ: COIN), which processed just $6 billion in crypto transactions during that time. Excitement for this DEX is growing and with it an active user base that Juliano expects will accelerate growth into 2022. It’s a bandwagon you might consider hopping on.
- Cryptocurrency traders seeking a DEX that facilitates perpetuals
- Perpetual crypto trading with cross-margin capability
- Complete anonymity
- Trade to earn dYdX token, which has multiple use cases
- No gas fees
- Competitive rates
- Perpetuals not available for U.S. traders per U.S. law
dydx Ratings at a Glance
dYdX functions with the security and transparency of a DEX but the speed and usability of a centralized exchange.
In any market, using financial products like derivatives lets you achieve superior risk management and open up previously unavailable avenues of potentially lucrative speculation. The benefits are no different in crypto, and the possibilities are blinding. dYdX swats away the heavy hand of a regulated central clearing house to give traders global and equal access while retaining full control of their funds.
The platform provides users with the ability to trade perpetual contracts. This strategy is ideal for individuals as well as large investment firms because derivatives such as perpetual contract accounts allow them to gain access to strong return on investment (ROI) potential during market movements without holding any cryptocurrency directly.
With low account requirements, committed anonymity and a Layer 2 protocol through StarkWare, the creators of dYdX stay true to the idea of DeFi. Anyone can open a dYdX account for as little as $1, and the protocol is globally accessible.
Perpetual contracts: Perpetual contracts are synthetic trading markets that use stablecoins as collateral to provide exposure to liquid assets. Going long or short and using leverage on futures contracts allows users to participate in market movements, limit risk and earn a profit by trading perpetuals. A futures contract is a financial derivative contract, which means that its value is derived from the performance of the underlying asset. Perpetuals are currently not available to people or companies who are residents of, or are located, incorporated or have a registered agent in, the United States or a restricted territory.
dYdX, as a DEX, means that there’s no parent holding your hand while you cross the crypto derivatives street. But you’re a grown up, and with the info you find on the dYdX site, you don’t need mom bending over you anymore. The dYdX website has all the information you need, including actionable tutorials. The Help Center and the FAQs page have answers to frequently asked questions like register, fees and liquidity. dYdX offers responsive email support. The secure live chat works well. dYdX’s robust and participative presence on social media on all the places you and your fellow traders rely on, including Twitter Inc. (NYSE: TWTR), LinkedIn, YouTube, Reddit, Github and Discord, justify a 5 star customer service rating.
The Layer 2 advantage StarkWare brings in speed, scalability, security and privacy also means savings to traders. Fees are based on volume in a maker-taker fee model.
- Maker orders are orders that do not immediately fill and rest on the order book — these orders add depth and liquidity.
- Taker orders cross existing Maker orders, removing liquidity.
- Fees for perpetuals also use the maker and taker model but are based on the user’s trading volume in the previous 30 days. dYdX charges no gas fees for perpetual trading. Fees for other trading actions vary from 0% (maker) to 0.10% (taker) depending on volume.
The introduction of the dYdX token has added a trading fee discount aspect to perpetual trading as well, with users being able to get anywhere from a 3% to 50% discount depending on the current balance of dYdX. In general though, only paying the network fees should be considered as below the global industry average when it comes to fee levels for crypto withdrawals. dYdX gets a 5-star rating for customer pricing.
Users have access to many benefits associated with using dYdX, and it earns a 5-star rating for these reasons.
- Speedy, anonymous signup: Account opened in less than 5 minutes.
- Education: Access tutorials to learn the system and enhance trading.
- Low fees and no gas costs: Once you deposit to Layer 2, you no longer pay fees to miners for each transaction.
- Fast transactions: Trades are executed instantly and confirmed on the blockchain within hours.
- Fast withdrawals: Unlike other platforms, you don’t wait to withdraw your funds from Layer 2.
- Use on mobile browser: The app, website and desktop experience offer similar high-quality experiences. Every trading platform has a trading view where you can see current crypto price charts and place orders.
- Secured by StarkWare Layer 2 protocol: A Layer 2 solution provides increased security and privacy via zero-knowledge rollups.
- Cross-margining: Users can access leverage across positions in multiple markets from a single account.
Every aspect of the dYdX experience exceeds expectations. Setting up an account involves just a few privacy-maintaining steps:
- Obtain an Ethereum wallet like Metamask or Coinbase Wallet.
- Access the dYdX website.
- Connect your Ethereum wallet.
- Click Deposit.
- Select relevant currency.
- Select relevant wallet.
- Enter the amount.
- Click Deposit.
Its accessible mobile web-application and informative website give it a 5-star rating. The additional benefit of anonymity in trades on the platform enhances your trading further.
dYdX Exchange vs. Competitors
dYdX offers an integrated competitive platform. A unique feature is the user’s ability to register without handing over assets to a centralized authority as is required on traditional centralized exchanges. Users can perform transactions with zero or low gas costs, cheaper trading fees and smaller minimum order sizes thanks to dYdX's in-house Layer-2 scaling solution. This significant step forward in DEX perpetual trading will likely aid dYdX in its quest to become the top decentralized trading protocol in the field.
With the company’s name as a nod to the mathematical magic of differential equations, how can dYdX not become a cornerstone of your crypto derivatives trading experience? Its advanced Layer 2 protocol means that the exchange lives up to its promises of fast, anonymous, gas-less Layer 2 perpetuals.
dYdX Exchange Tutorial
Frequently Asked Questions
Is dYdX exchange legit?
The dYdX exchange is fully legitimate, with backing from some of Silicon Valley’s most prominent investors. This DEX, with customer funds locked in smart contracts, is safe to use.
Does dYdX require KYC?
No KYC is required for a dYdX account, and no centralized staff oversee your funds on DEXs like dYdX.
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