What Is dYdX (DYDX)?
Also known as: DYDX, dYdX Chain
In short
dYdX is a decentralized exchange where users trade leveraged derivatives, chiefly perpetual contracts, using an order book model; the network's governance and staking token is DYDX.
dYdX was founded by Antonio Juliano, and its first versions ran on Ethereum. The platform's third version used a Layer 2 solution based on StarkEx, which links transactions to Ethereum with zero-knowledge proofs. With the fourth version, dYdX moved to its own independent blockchain (dYdX Chain) built with the Cosmos SDK.
On dYdX Chain, the order book is kept and matched off-chain in validators' memory; matched trades are then finalized on-chain. This offers a trading experience similar to centralized exchanges while users keep control of their assets. The DYDX token is staked for the security of the network and used in governance votes; revenue from trading fees is also distributed to stakers.
Leveraged derivatives trading can cause a position to be liquidated even on small price moves. Smart contract and network risks, dependence on price oracles and funding rate costs are also factors to consider. The platform applies access restrictions to users in some countries for regulatory reasons.
Last updated: · This content is for information purposes only and is not investment advice.