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dYdX v4: Redefining The DeFi Derivatives Landscape
Jake Kennis and 1 other
Key Takeaways
18 min read
  • dYdX has chosen the Cosmos stack as the best suited to enabling full decentralization of the protocol while delivering the highest performance. It aims to build a product with performance and UX on par with the top CEXs.
  • Trading volume on dYdX far surpasses its DeFi counterparts and can be best compared to CEXs. Its average monthly derivatives volumes (since December 2022) exceed that of Deribit, Kraken and Bitfinex. However, it lags far behind the largest derivative CEXs like Binance, OKX, Bitget and Bybit. This is the market that dYdX is trying to capture and could represent significant growth opportunity for the company.
  • At present, depositors into the dYdX bridge appear to be very distributed, indicating that a large number of addresses find value in trading there (and it is not dominated by just a small number of addresses).
  • V4 is highly ambitious, and if it can achieve its aims, dYdX could serve as a prime example of a project that delivers competitive UX and product alongside the benefits of blockchain technology.


dYdX Today

dYdX is a DEX for trading perpetuals , where traders can gain exposure to various assets on the platform with leverage of up to 20x. It is widely regarded as the gold standard derivatives DEX and has famously surpassed volume on Coinbase at times. However, in its current form, it is not properly decentralized in the sense that some features such as its order book are centralized and all fees...