dYdX Exchange Review
In-depth review of dYdX platform for margin trading, borrowing, and lending cryptocurrencies.
US-based cryptocurrency exchange dYdX has been operational since 2017. The business is mainly a derivatives exchange, which means its focus is on derivatives trading.
Traditionally, a derivative is defined as an instrument that draws its value from another asset (stocks bonds, commodities, etc). The same is applicable in the cryptocurrency world, where the values of crypto-based derivatives are derived from the prices of certain digital assets. Derivatives trading is popular with cryptocurrencies like Bitcoin, Ethereum, DAI, and USD Coin.
As a DEX, DYdX goes beyond asset trading to include the borrowing and lending of cryptocurrencies.
Key Points
- dYdX is an Ethereum-based platform for derivatives trading, as well as crypto borrowing and lending services.
- dYdX is among the few exchanges that have met all requirements to enjoy net positive by the end of the year.
- All smart contracts at dYdX have been certified by “Open Zeppelin.”
- Traders can customize the platform to their liking.
What is dYdX?
dYdX is a permissionless exchange platform where margin trading, spot trading, borrowing, and lending services take place. Built on smart contracts with Ethereum, the platform is fully decentralized.
dYdX provides ETH-USD perpetual futures, and users can enjoy 10x leverage using ETH collateral and zero expiration date. The introduction of maker and taker fees set dYdX on track to become one of the first DeFi firms to achieve net positive as the year 2020 drew to a close.
The successful combination of derivatives and lending offerings by the dYdX exchange has set it apart with a really high trading volume, a record only a few DeFi products can boast of.
Why choose dYdX Exchange?
There are several reasons why the platform is the best option for trading. Firstly, the dYdX exchange is trustless, and because of this, there will be no counterparty risks.
Secondly, liquidity is assured, meaning that the platform aggregates lending liquidity and spot across various exchanges.
Thirdly, it is accessible and powerful. Accessible in the sense that no signup is required before you can begin trading. Fourthly, the product offers more competitive rates.
Borrowing with dYdX
The supported assets at the exchange are ETH, DAI, and USDC. The minimum collateralization is set at 125% and to prevent liquidation, it must be maintained above 115%. Your Ethereum wallet is connected directly to the product, thereby crediting you with the borrowed funds automatically.
So, this goes without saying that you need an Ethereum wallet for this product to work for you. The borrowing interface is accessible on mobile and desktop, and it is user-friendly. Simply select the digital asset you want to borrow, choose an amount, and the account that will be used for collateral. The transaction will be completed in less than a minute.
Lending
dYdX offers competitive interest rates and already has a reputation of operating one of the top interest accounts for DAI, ETH, and USDC in the market.
To become a beneficiary of the competitive interest rates at dYdX, owning an Ethereum wallet is a must. Connect to the platform and transfer your assets into it, and automatically your interest earnings will begin to accumulate in real-time.
Trading View at dYdX
A trading view is a feature of every trading platform. It is the part of the website where the current price of a cryptocurrency, as well as its price chart, is shown. Also added are buy and sell boxes, where orders can be placed for a certain cryptocurrency.
Order history is also provided so that traders can see their performance in previous transactions. dYdX allows traders to customize the platform to their preference.
The Security Structure
dYdX exchange is powered by Ethereum and has never fallen victim to any malicious attack. Information on the company’s website has made it quite clear that security is non-negotiable and its smart contracts have been verified by a company called “Open Zeppelin.”
What the future holds for dYdX Exchange
The exchange is working towards the addition of new assets, markets, multi-collateral Dai assets, and features before the end of the year. Recently, the exchange integrated the 0x protocol and introduced limit orders to the interface. The liquidity and volume of dYdX will keep increasing with the addition of new markets and features.
