stub Investing In DYDX - Everything You Need to Know -
Connect with us

Dydx Investor

Investing In DYDX – Everything You Need to Know

Updated on is committed to rigorous editorial standards. We may receive compensation when you click on links to products we review. Please view our affiliate disclosure. Trading involves risk which may result in the loss of capital.

DYDX is a community-powered derivatives DEX (decentralized exchange). The protocol combines a new cryptocurrency, advanced trading features, a responsive DEX, and layer-2 scalability to create new ROI opportunities for traders. The network continues to see growing adoption in the market due to its unique characteristics and services.

Since its launch, DYDX has registered +15,000 traders and conducted +504,000 in trades. These actions equate to +$4 billion in trading volume. Additionally, the platform recently underwent a major upgrade. The update introduced StarkWare's layer-2 solution to the ecosystem which expanded its functionality and scalability considerably.

What Problems Does DYDX Attempt to Fix?

DYDX helps to solve a lot of major issues faced by both crypto and traditional investors. For one, it solves exposure issues for major investment firms. The lack of regulatory infrastructure makes trading cryptocurrency too risky for most large firms.

DYDX Trading View

DYDX Trading View

The platform provides users with the ability to trade perpetual contracts. This strategy is ideal for large investment firms as derivatives such as perpetual contracts allow them to gain access to ROI potential during market movements without holding any cryptocurrency directly.

Financial Barriers

In the past, regular traders could find it very difficult to gain access to derivatives markets. In many instances, investment firms could require you to be an accredited investor. Accredited investors are individuals who can show at least 1 million in liquid assets. These financial barriers kept most traders out of the derivatives markets until now.

The developers behind DYDX kept in line with the spirit of DeFi (decentralized finance) with their low account requirements, Anyone can start a DYDX account for as little as $10. Additionally, the protocol is open to a global audience. People from anywhere around the world can participate in the DYDX platform.

Lack of Liquidity

DYDX helps reduce liquidity issues in the market. The protocol accomplishes this task by incentivizing network participants. The platform also creates more cross-market liquidity using the DYDX token trading pairs.

Withdrawal Delays

One of the worst things about many exchanges is withdrawal delays. In this fast-moving market, any delays can equal losses or missed opportunities. Recognizing this fact, DYDX integrated no-wait withdrawals into its platform.

DYDX Foundation - Twitter

DYDX Foundation – Twitter

Lack of Privacy

Privacy concerns continue to plague the market. Recently, projects have begun to remove their privacy options or scale them back as a way to appease regulators. This decision has led to users becoming easier to target by hackers and others. DYDX's layer-2 upgrade integrates zero-knowledge proofs to provide additional privacy.

Zero-Knowledge Proofs

Zero-knowledge proofs are systems that enable you to verify data without revealing any of the data directly. For example, let’s say you knew that someone in the room had been chosen to run the company in the next month. You encounter another person who also believes they have the same information.

Rather than just blurting out the person’s name, you decide that you want them to describe the person's physical attributes until you are convinced they have the same person in mind or not. Zero-Knowledge proofs accomplish this on the blockchain. They are one of the best ways to improve privacy and reduce data leaks.

Benefits of DYDX

DYDX introduces many benefits to the market. The protocol provides users with a transparent, fair, and secure way to access perpetual crypto contracts. The system was built to remove any technical requirements so new users can operate the DEX with ease.

Perpetual Contract Options

Perpetual Contract Options

Low fees

DYDX users gained a lot from the Layer 2 upgrade. This second-layer system eliminated both gas and miner fees for users. It also improved the scalability of the platform. DYDX users enjoy near-instant trades that settle on-chain.

Leverage Trading

DYDX is one of a select few DEXs to offer leveraged trading options to the market. Users can strengthen their position with 25x buying power using this feature. You can even conduct leverage across positions from different markets using your main account.

Passive Income

DYDX users can stake their tokens as well. Staking on the platform is simple using the dashboard. You can see details regarding your rewards to help you determine how many tokens you wish to stake and for how long. Your staking rewards are paid out in DYDX that you can then stake again if you wish.

How Does DYDX Work

The DYDX exchange leverages a multi-layered blockchain strategy to provide security and responsiveness. The platform was built to leverage the security and stability of the Ethereum blockchain. The recent layer-2 upgrade helped to improve the capabilities of the protocol and lower its operating costs.

Users can select to trade on DYDX using the mobile app or online portal. Both are easy to navigate and require no previous crypto trading experience. You can access all vital features using the mobile Dapp including tradings, sending, receiving, and staking DYDX tokens.

Coingecko - DYDX

Coingecko – DYDX

Community Governance

DYDX provides users with community governance options. Stakers and those holding DYDX tokens can participate in this feature. Users who meet this criterion can put forth a proposal regarding how to alter key aspects of the network. The community votes on your proposals. The approved ones become implemented.

History of DYDX

DYDX entered the market in 2017. The project's founder, Antonio Juliano was an ex-Coinbase and ex-Uber engineer. The platform saw immediate interest from investors. As such, the network was able to secure a reputable team of backers including Andreessen Horowitz, Polychain Capital, Three Arrows Capital, Naval Ravikant, Elad Gil, DeFiance Capital, Brian Armstrong, Fred Ehrsam, and many more.

How to Buy Dydx (DYDX)

Dydx (DYDX) is available on the following exchanges:

Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Uphold Disclaimer: Assets available on Uphold are subject to region. All investments and trading are risky and may result in the loss of capital. Cryptoassets are largely unregulated and are therefore not subject to protection.

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommend exchange for USA residents. (Excluding New York & Washington state).

WazirX – This exchange is part of the Binance Group, which ensures a high standard of quality.  It is the best exchange for residents of India.

DYDX – New Opportunities for All

You have to commend the DYDX development team. They have created a unique and helpful DEX that provides services not found on the competition. The network's unique technical structure and features make it a powerful tool for both new and experienced traders. For these reasons, you can expect DYDX to continue to spark interest moving forward.

David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including