dYdX Review 2022 – Features, Fees, and Security

1. dydx exchange review

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  • What is dYdX Exchange?
  • What is DYDX Token?
  • Can US citizens trade on dYdX?

DeFi (Decentralized Finance) has given a new perspective to how financial services could exist in a decentralized, non–censored ecosystem. The industry is still developing, and it is expected to give traditional financial platforms a run for their money in a few years.

An essential element of the DeFi industry is the Decentralised Exchanges (DEXs). They allow users to trade with their crypto assets non-custodial while keeping their identity anonymous.

Today we will review one such Decentralised Exchange (DEX) called dYdX. We will go through each component of the platform to understand whether it is worth your time.

So, without further ado, let’s get started.

What is dYdX?

dYdX is a non-custodial Decentralised Exchange (DEX) built on the Ethereum blockchain network. The platform derives its name from the mathematical equation dY / dX, which represents the measure of Change.

The platform was established in 2017 in the San Francisco Bay Area, California, USA. dYdX provides trading with derivatives along with margin trading upto 20 times.

On dYdX, a user can access an off-chain order book with an on-chain settlement mechanism. This allows users the security of a decentralized exchange with the speed and comfort of a centralized exchange.

This is done in a complete decentralized ecosystem while keeping users’ identities anonymous.

dYdX is one of the crypto market’s top Decentralised Exchanges (DEXs). Based on trading volume, it comes second in the market after Uniswap.

In August 2021, to handle the further development and governance of the platform dYdX foundation was launched.

You can read more about dYdX here. Now let’s know more about the founder of dYdX.

Who is the Founder of dYdX?

Antonio Juliano is the Founder and CEO of dYdX Exchange.

2. Antonio Juliano - Founder dYdX

Antonio Juliano – LinkedIn
Founder and CEO

Antonio is based in San Francisco Bay Area, California, USA. He completed BSE, in Computer Science from Princeton University. Before establishing dYdX, he was a software engineer with Coinbase, Uber, and MongoDB.

What are the Features of dYdX Exchange?

The features of the dYdX Exchange are as follows:

1. Trading Crypto

3. dYdX Trading Interface
dYdX Trading Interface

dYdX allows the following types of trades:

a) Perpetual Derivatives Trading
b) Margin trading on Perpetual Derivatives upto 20 times

Thus, a user gets access to the derivatives market, which can further be used for Margin Trading.

Further, a user can place a market, limit, or stop-limit order on the platform. The web interface of dYdX is very interactive and provides a seamless experience to the user.

2. Mobile Application

4. dYdX Mobile App
dYdX Mobile App

dYdX has a mobile application for iOS devices. The mobile application allows users to

a) Trade from anywhere
b) Track the trades
c) Avoid missing out on opportunities

You can read more about the dYdX mobile app here.

3. Hedgies NFTs

5. dYdX Hedgies NFTs
dYdX Hedgies NFTs

dYdX has its in-house NFT (Non-Fungible Token) collection called Hedgies. These are 4200 unique collectible avatars created on the Ethereum Blockchain network.

Each Hedgie is an ERC 721 token, which is the token standard for NFTs created on Ethereum Network.

These NFTs are also available on the Opensea secondary NFT marketplace.

What are the fees charged by dYdX Exchange?

dYdX exchange charges a base trading fee as follows:

  • Maker Fee – 0.02% of the transaction value
  • Taker Fee – 0.05% of the transaction value

This fee gets discounted with an increase in users’ trading volume. Based on the volume, the fees would be as follows:

6. dYdX Trading Fee Discount 1
dYdX Trading Fee Discount

A user can also hold a DYDX token to get a further discount on the trading fee. The discount available for DYDX token holders is as follows:

7. dYdX Trading Fee Discount 2
dYdX Trading Fee Discount

Further, if you hold Hedgies NFT, then you can get one tier increase in your discount rate. For Example, if you hold 100 DYDX tokens, then you are eligible for a 3% discount on your fee. However, if you hold 100 DYDX tokens and 1 Hedgies NFT, then you would be eligible for a 5% discount.

For withdrawals, there are 2 types:

  1. Fast Withdrawals – Fee charged in 0.1% of the withdrawal amount
  2. Slow Withdrawals – No Fee

In addition to the fee charged by dYdX, a gas fee of the Ethereum network is also required to be paid on all withdrawals.

Supported Wallets by dYdX

dYdX exchange supports the following wallets:

Type of WalletName of the Wallet
Mobile WalletMetamask
Mobile WalletCoinbase Wallet
Mobile WalletTrust Wallet
Mobile WalletRainbow Wallet

For more information on Crypto wallets, you can refer to our Crypto Wallet Guides as follows:

DYDX Token

What is DYDX Token?

DYDX is the in-house token of the dYdX exchange that would be used to manage and govern its Layer 2 protocol.

What are the Use Cases of DYDX Token?

The use cases of the DYDX token are as follows:

  1. Staking
  2. Yield Farming
  3. Governance
  4. Fee Discounts

What is DYDX Token Economy?

DYDX Tokenomics

TokenomicsAmount
Maximum Supply (Source)1 Billion
Total Supply1 Billion
Circulating Supply65 Million (6.5% of Total Supply)
Token Price (As of 23 June 2022)$ 1.43
Market Cap$ 93 Million
Fully Diluted Value$ 1.43 Billion
24 Hour Trading Volume$ 84 Million

What is DYDX Token Distribution?

8. DYDX Token Distribution
DYDX Token Distribution

What is DYDX Token Emission?

9. DYDX Emission Schedule
DYDX Token Emission Schedule

Based on the above emission schedule from February 2023, a huge supply of DYDX tokens would be unlocked. This would immensely increase the token’s circulating supply in the market. Further, this could lead to a significant fall in the market price.

Where can you buy DYDX Token?

A user can buy a DYDX token on the following centralized and decentralized crypto exchange

Centralized ExchangesDecentralized Exchanges
BinanceUniswap
KuCoin Sushiswap
Kraken 
ByBit 

You can read more about the DYDX token here.

Investors of the dYdX Platform

The dYdX exchange is funded by one of the top investment and venture capital firms as follows:

10. dYdX Investors
dYdX Investors

What are the Pros and Cons of dYdX Exchange?

The pros and cons of the dYdX exchange are as follows:

Benefits of dYdX Exchange

The benefits of dYdX Exchange are as follows:

1. Ease of Use

dYdX platform is relatively easy to use. It has an interactive web interface and a mobile application for iOS devices.

2. Gasless Trading

Since all the trade transactions are processed on the Layer 2 protocol, no gas fee is charged from the user.

However, a gas fee is charged for deposit and withdrawal of funds on the platform.

3. No KYC

dYdX keeps the identity of its users completely anonymous. There is no need for customer KYC. Users would simply connect the wallet, trade, and leave the platform.

4. Security

11. dYdX Security Audit
dYdX Security Audit

All the smart contracts of the dYdX platform are open-sourced and duly audited. Further, as the platform is non-custodial in nature, it does not keep custody of users’ funds.

Limitations of dYdX Exchange

The limitations of dYdX Exchange are as follows:

1. Limited token pairs

dYdX exchange offers a limited number of token pairs.

2. No Fiat on-ramp

dYdX allows only crypto to crypto deposits and withdrawals. There is no option to deposit fiat currencies.

3. Gas cost on withdrawal and deposit

Although dYdX does not charge any fee for deposit or withdrawal of funds, the Ethereum gas fee must be paid by the user. However, dYdX often allows promotional gasless deposits. Read more about dYdX gasless deposits here.

Conclusion – dYdX Exchange Review

In our understanding, dYdX is a reasonably decent exchange. We have used it and found the transaction experience seamless, and the user interface is interactive.

We hope that this post helped you in evaluating the dYdX Exchange. Let us know your feedback and comments below.

Please note that nothing written in this post is a piece of financial advice. Please consult your financial advisor before making any financial decision.

Further, subscribe to CoinSutra Newsletter to get your FREE trading Ebook.

Resources

Frequently Asked Questions (FAQs)

Can US citizens use dYdX?

No, citizens of the United States of America (USA) are prohibited from using the dYdX exchange.

Can US citizens buy DYDX tokens?

No, citizens of the United States of America (USA) are prohibited from buying, holding, or trading in DYDX tokens.

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