What is DYDX Coin? Everything You Need to Know About DYDX Coin

Coin DYDX – the coin of a project related to a decentralized derivatives exchange, has made a breakthrough with a trading volume reaching over 4.3 million dollars. Today’s article is a comprehensive guide on what Coin DYDX is, exploring all information about DYDX coin and evaluating whether DYDX coin has potential at the present time.

1. WHAT IS THE DYDX PROJECT?

The dYdX project is a trading platform, also known as the dYdX decentralized exchange, built on the Ethereum blockchain. The name dYdX is inspired by the Leibniz notation in mathematics. In fact, at first glance, it may seem like another lending protocol on Ethereum, but diving deeper into dYdX Coin, you’ll see that it’s a protocol driving decentralized finance (DeFi).

The dYdX exchange allows users to borrow, lend, and trade futures of popular cryptocurrencies. Transactions such as margin trading, options, and derivatives are no longer unfamiliar concepts; however, in the cryptocurrency market, these features are primarily offered by centralized exchanges like Binance, Huobi Global, KuCoin, etc. dYdX aims to bring common financial trading tools into the blockchain world.

1.1. The Development Team of dYdX Coin

The dYdX Coin project was founded in 2017 by former Coinbase exchange software engineer Antonio Juliano. Antonio graduated from Princeton University with a degree in computer science and is an experienced blockchain programmer. He began his entrepreneurial journey with the dYdX exchange project and currently holds the position of CEO of dYdX.

In addition, the head of dYdX’s operations is Zhuoxun Yin. Yin previously had experience at Nimble, a CRM sales & marketing platform, and at Bain & Company, a consulting service. He graduated from the University of Queensland with a bachelor’s degree in commerce.

1.2. The Uniqueness of dYdX Coin

When it comes to decentralized borrowing and lending, popular platforms like MakerDAO or Compound are often mentioned. So, there must be something unique about the dYdX exchange that makes traders choose it, right? If considered purely as an exchange platform, dYdX still has many limitations, but when looking at it as an open, trustworthy, non-custodial financial protocol, dYdX does an excellent job.

The dYdX Exchange combines the most advanced financial tools with decentralization. It supports margin trading, allowing investors to increase their exposure to digital assets through leverage. This concept is quite familiar to anyone who has participated in the forex market. The two types of margin trading on the dYdX exchange are: isolated margin trading and cross margin trading. The dYdX exchange currently offers leverage up to 25x. As soon as funds are deposited, the system will automatically start calculating interest for users.

Through a technology called zkSTARKS, it receives proofs and simultaneously verifies a series of off-chain transactions. These proofs are then sent back to the blockchain and verified by a smart contract. The zkSTARKS technology of the dYdX project helps eliminate costly computations from the mainnet without sacrificing decentralization.

2. FEATURES OF THE DYDX COIN EXCHANGE

The main features of the dYdX Coin exchange include:

• Leverage Trading: Users of the dYdX exchange can access leverage of up to 10x along with Perpetual contracts.

• Borrowing & Lending: Each cryptocurrency asset will have a lending pool where borrowers and lenders interact with each other. Smart contracts manage the assets to ensure transactions happen instantly without the need for lengthy matching. The uniqueness of this feature on the dYdX Coin exchange is that it focuses more on advanced, enhanced trading tools.
• dYdX Perpetual: A decentralized, non-custodial margin trading feature. The assets used as collateral to access this feature on the dYdX exchange are USDC, which also serves as the asset used for pricing all Perpetual markets.
• Portfolio Management: Users can view their dYdX Coin holdings, including the dYdX tokens they can receive, the dYDX available for withdrawal, and the amount of dYdX coins that have been staked.

3. WHAT IS DYDX COIN?

DYDX is a governance token for the layer 2 protocol of the dYdX exchange. The dYdX Coin is used to facilitate the layer 2 and allows traders, liquidity providers, and partners to participate as a community in contributing to defining the future of the protocol.

The project launched with over $10 million in venture capital and officially went live in 2019. The dYdX token was publicly sold in its initial ICO in September 2021.

3.1. dYdX Coin Information

The most basic information about the dYdX Coin that traders need to know includes:

• Token Name: dYdX token

• Symbol: DYDX

• Blockchain: Ethereum

• Token Standard: ERC20

• Token Type: Governance

• dYdX Coin Market Cap: $306,646,944.42

• Total Supply: 1,000,000,000 DYDX tokens

• Circulating Supply: 65,569,295 DYDX

• Current dYDX Coin Price: $4.71

(Traders can find the information above on dYdX Coin on Coingecko or dYdX CoinMarketCap)

To stay updated with the latest information or dYdX Coin news, follow the project’s social media pages.

• dYdX Coin Twitter: https://twitter.com/dydx

• dYdX Coin Discord: https://discord.gg/Tuze6tY

• dYdX LinkedIn: https://linkedin.com/company/dydx

• dYdX Coin Reddit: https://www.reddit.com/r/dydxprotocol

3.2. dYdX Coin Token Allocation

A total of 1,000,000,000 dYdX tokens have been minted and will be distributed in the circulating market over the next 5 years, starting from August 3, 2021. The allocation of the dYdX Coin is as follows:

Community: 50%, equivalent to 500,000,000 dYdX tokens:

• Trading Rewards: 25%
• Retroactive Mining Rewards: 7.5%
• Liquidity Provider Rewards: 7.5%
• Reserves: 5%
• USDC Liquidity Provision: 2.5%
• Safety Staking Pool: 2.5%

Investors: 27.73%, equivalent to 277,295,070 dYdX tokens

Development Team: 15.27%, equivalent to 52,704,930 dYdX tokens

Future Development Team Experts: 7%, equivalent to 70,000,000 dYdX tokens

The inflation rate after five years of issuance will be 2% per year to ensure the supply for the community to continue contributing to the dYdX Layer 2 Protocol. By July 2026, dYdX token holders may have the authority to decide the maximum supply of dYdX tokens to be minted, so the inflation rate will be approximately 2% per mint. All newly issued tokens will be allocated by the governance and will be distributed immediately.

The chart below shows the total liquidity supply over time:

3.3. What is the Purpose of dYdX Coin?

dYdX Coin within the dYdX network will be used for the following purposes:

• Governance: Users can view current and past governance proposals. dYdX Coin holders will be granted two governance rights: the right to propose and the right to vote.

• Staking: The dYdX coin staking feature is likely not too unfamiliar, as most decentralized finance (DeFi) platforms offer staking capabilities. Users can stake USDC and dYdX Coin to earn rewards.

• Trading Rewards: Through trading activities on the Layer 2 exchange, users will receive rewards. These rewards will be paid and distributed every 28 days.

4. HOW TO OWN dYdX COIN

Traders and investors can own dYdX Coin through the following methods:

• Receive Trading Rewards: As mentioned in the dYdX token allocation section, 25% of the initial supply, approximately 250,000,000 DYDX tokens, is allocated to those who trade on the dYdX Layer 2 protocol, based on a formula that combines fees and open interest. However, this protocol is not available to traders in the United States and some other restricted countries. The withdrawal time for the dYdX reward tokens will be around 7 days.

• Participate in Retroactive Mining: The dYdX retroactive mining program allocates about 7.5% of the token supply. These tokens will be distributed to any user who has completed certain trading milestones (details in the image below).

• Participate in Liquidity Provision: Similarly, 7.5% of the dYdX coin supply is allocated for distribution to users who participate in liquidity pools, based on a formula that combines activity time, bid-ask spread, and market quantity.

• Buy on Cryptocurrency Exchanges: Unlike investors who purchased dYdX tokens during the ICO event, the methods mentioned above can be used to acquire more dYdX coins. Currently, the simplest way to own dYdX tokens is to buy them on cryptocurrency exchanges, as they are listed on most platforms like Binance, Gate.io, Huobi Global, KuCoin, FTX, etc. Binance, specifically, offers up to six trading pairs for dYdX coins.

5. dYdX COIN STORAGE WALLETS

The token standard of dYdX is ERC20, so it can be stored on most cryptocurrency wallets available today. The dYdX exchange currently supports around 8 types of cryptocurrency wallets that can connect directly to the platform. Some of the well-known wallets in the cryptocurrency market include Metamask, Trust Wallet, and others.

6. EVALUATION: DOES dYdX COIN HAVE POTENTIAL?

dYdX Coin had an explosive year in 2021, with an all-time high (ATH) of $27.78 in September 2021, emerging as one of the most prominent protocols on Ethereum. This made it highly anticipated in 2022. After the airdrop event, the momentum surged for the dYdX project, which was reflected in the fact that the dYdX exchange surpassed Coinbase’s daily trading volume for the first time in its history.

6.1. dYdX Coin Roadmap

At the end of January, the dYdX project announced its latest 2022 roadmap, with the goal of developing into an open-source, community-managed, and fully decentralized exchange by the end of 2022. Key activities and milestones for 2022 include:

• Prioritizing the development of the next version of the dYdX protocol, dYdX V4

• The current dYdX perpetuals protocol will no longer be used once the transition to the dYdX V4 protocol is complete.

• No third parties (including dYdX Trading Inc.) will receive transaction fees on dYdX V4.

6.2. The Potential of dYdX Coin

Currently, the price of dYdX Coin is still on a downward trend since it reached its all-time high. However, looking back, even during two major declines in Bitcoin’s price last year, the dYdX price was not heavily impacted. The price of dYdX rose from $10.23 to $22.66 in just one month. Therefore, considering the potential of dYdX Coin, it has the possibility of a comeback as the development team is still working on upgrading and improving the trading versions for the dYdX exchange.

7. CONCLUSION

The above information provides the essential details about dYdX Coin, including what dYdX coin is, how the dYdX token is allocated, the features on the dYdX exchange, and the latest updates on the dYdX 2022 roadmap, along with evaluations of dYdX Coin’s potential. The future is unpredictable, and while dYdX Coin has potential, no one knows exactly when its price will start growing again. Therefore, traders and investors need to stay updated on the latest news about the dYdX project and analyze other factors in the market.