Today, what I want to introduce to you is DYDX currency, which may be unfamiliar to some new investors. Then, let's follow Xiao Bian to see what DYDX coins are.
What is DYDX coin?
DYDX is both a decentralized lending agreement based on Ethereum and a decentralized digital currency derivatives trading service platform. Founded in 2017, DYDX has been invested by leading venture capital firms in Silicon Valley, such as a16z, Polychain, 1Confirmation and Coinbase.
DYDX is a powerful open trading service platform, which plays a key role in the following three aspects: lending, borrowing and collateral trading. In addition, DYDX launched a decentralized BTC permanent contract market, aiming to solve the problems in the permanent swap transactions of the centralized trading service platform.
The DYDX coin is a kind of governance token, which is the platform currency of the DYDX exchange. It allows the DYDX community to own and regulate the DYDX protocol. As a platform currency, this currency is mainly used for DYDX agreement remediation and service fee discount. The open protocols of the DYDX Exchange are basically the 0x protocol and Ethereum. This project is driven by smart contracts and uses a relatively traditional order book to better serve customers.
At present, the exchange has improved its performance while dealing with security risks. Is DYDX worth investing? DYDX is the first decentralized futures exchange to establish and release available products. It is an order book type DEX. Point to point transactions are carried out between traders, and the market makers and traders of both long and short sides play games. DYDX is built on the Ethereum two-layer network Starkware, and uses the StarkEx transaction module to complete the decentralized self-management of assets. DYDX can provide a trading experience close to the centralized exchange, and also uses a business model similar to CEX. At present, its trading volume is the first among derivatives DEX driven by transaction mining. To sum up, this project deserves attention.
What is the future prospect of DYDX coin?
DYDX's contribution to its ecological development lies in that it promotes the development of its network through trading rewards and circulating pledge rewards. This is not a new thing in itself. Many DeFi projects in the past have similar incentives. The DYDX token reward will bring more customers to trade and more people to provide liquidity. Better liquidity brings more traders. Some traders are for reward, while others are for better trading experience, or both.
At present, about 5 million DYDXs are encouraged every month, exceeding 60 million US dollars according to the current value. Naturally, there will be some balance between them. With the arrival of a large number of traders and liquidity providers, the proportion of distributable rewards will decrease, and the cost of receiving rewards will increase. As the return rate reaches a certain balance, liquidity miners or traders may enter other platforms, such as Perpetual, and eventually form a balance.
In addition, these token rewarded traders or circulating pawners will also have a greater impact on prices. Whether these customers are sales oriented customers, ownership oriented customers, or transaction oriented customers (due to the importance of trade discount ownership), the proportion and behavior of different types of users will have a direct impact on their future ecological development.
Speaking of this, I believe you have a certain understanding of what DYDX is and what its future prospects are. In general, Xiao Bian also reminds all investors that no matter what kind of digital currency you want to invest in, as long as you are in the currency circle, you will face very big investment risks. Therefore, you must make a good risk estimate before investing, not invest blindly, and invest your money without thinking clearly. You must be a planned and resourceful investor, so that you can survive in the turbulent currency circle.
