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DeFi-Decentralized Finance, that is, open finance, uses distributed protocols to build an open financial system, and uses blockchain technology to redefine the service model of financial derivatives. Through asset tokenization, DeFi overturned traditional financial services. Including financial service models such as lending, asset trading, and mortgage loans, digital currencies and encrypted stable currencies can also be linked to legal tenders to carry out a variety of financial innovations. Due to the lack of information accuracy and effectiveness, this landing scenario is highly sought after by market investors, focusing on the three hot spots of stablecoin, lending market, and decentralized exchange.
According to DeBank data, as of January 2021, the total value of DeFi locked positions reached 32.06 billion U.S. dollars, and the actual locked position value was 23.04 billion U.S. dollars. As of January 2020, the total locked position value is US$916 million, the actual locked position value is US$761 million, the total locked position value has increased by about 35 times, and the actual locked position value has increased by about 30 times.
At the same time, in January 2020, the total lock-up value of spot and margin products in the dYdX Solo agreement was 16.36 million US dollars. As of January 2021, the total value of locked positions has reached US$126 million.
From January 2020 to January 2021, the highest trading volume of DEX exceeded US$3.29 billion. It can be seen that the crazy degree of the market and the rapid development of the industry will inevitably lead to a flood of DEX platforms. Intense competition to avoid.
The cumulative trading volume of dYdX has exceeded USD 3 billion, with an average daily trading volume of approximately USD 10 million. dYdX launched perpetual contract trading in 2020 and currently accounts for about 45% of the total transaction volume. Since its launch, it has generated more than US$2.4 million in transaction fees and has grown at a rate of 30% per month. In December 2020, dYdX reached its largest trading volume ever in a week, with a trading volume exceeding US$145 million. After dYdX launches Layer-2 in January 2021, transaction volume is expected to expand rapidly.
In addition, according to LoanScan statistics, dYdX has generated $17 billion in crypto loans.
Comparison of major DEX platforms
DEX insists on decentralized features such as permissionless and non-custodial, attracting many users who criticize centralized exchanges. Perpetual contracts, as a hot spot of DEX platforms, have characteristics similar to traditional futures contracts, but they break the spot Industry barriers in traditional markets such as futures and futures, such as the underlying asset itself does not need to be traded, contract prices track market prices, high leverage, and high liquidity, so that participants do not need to manage frequently, reduce asset custody issues, and use flexible leverage to make capital efficient Increased and efficient flow makes it easier for buyers and sellers to participate in it, and thus is sought after by users.
Below we enumerate five DEX platforms currently on the market and their characteristics.
Among them, dYdX, as the world’s first decentralized digital currency derivatives trading platform, applies a hybrid trading model, ensures DEX security through a centralized order book, and has the speed and liquidity of CEX, and supports margin trading, spot trading and Lending services, based on protocols and Ethereum, establish more open, transparent, and secure financial products, with a completely transparent and verifiable clearing mechanism and funding rate mechanism. Margin supports ETH-DAI, ETH-USDC, DAI-USDC trading pairs, and perpetual contracts support BTC/USD, ETH/USD and Link/USD trading pairs. Support 10 times maximum leverage ratio, initial margin 10%, maintenance margin 7.5%, and insurance fund. No KYC registration is required, no BTC exposure.
Before the advent of dYdX, in order to increase leverage to buy more ETH, many users need to mortgage ETH in the lending application to lend stablecoins, then exchange the stablecoins for ETH at the exchange, and finally mortgage them to the lending application again, and so on. . The emergence of dYdX not only provides the function of mortgage lending, but also facilitates customers to increase leverage to complete the closed-loop transaction in a simpler way. In addition, on the basis of borrowing and lending, dYdX also adds transaction functions to meet the needs of users to add leverage in one operation.
In addition to the platform’s own characteristics and advantages, dYdX also has a strong technical background as support. The founder Antonio Juliano graduated from Princeton University, majoring in computer science. He was once affiliated with Coinbase, Uber and MongoDB software engineers. Most of the core members of the team are from overseas universities and well-known companies, including Google, Bloomberg, Consensys, Wharton School of Business, University of Pennsylvania , Sharespost, Nerdwallet, Techstars, and BlockTower Capital, etc. As of October 2018, dYdX has received a total of $12 million in seed round financing, led by first-line overseas blockchain institutions A16Z and Polychain Capital. A strong core team background, recognition in the blockchain industry, and efficient platform technology support all make dYdX stand out from the fierce competition.
Ethereum Layer-2, which is commonly referred to as an off-chain solution, is contrary to Layer-1. It improves the transaction throughput of the basic chain, and its expansion technology moves transactions off the chain, making DeFi applications more effective. It reduces the transaction fees paid by users and enhances the timeliness of transactions. While expanding the performance of the blockchain, it also retains the decentralized advantages of distributed protocols. Currently popular Layer-2 solutions are divided into 6 categories, mainly:
Side chain: Both code and data are independent of the base layer, with a different validator from the base layer, and have their own security from the side chain.
State channel: Refers to the Layer-2 structure that the channel participants agree to carry out. All network participants are required to digitally sign any updates to the channel. Currently, the most extensive scheme is adopted and the usability is excellent.
Plasma: Sub-chain, an algorithm to increase throughput. The trustless child chain borrows security from its parent chain by regularly transmitting data, allowing two-way anchoring with almost no trust, and does not support low-latency transactions. It only transmits data to place transactions on the Ethereum chain.
ZK Rollup: Use zero-knowledge proof to process the validity of Layer-2 transactions. The proof itself is stored on the chain together with the transaction data, which has optimal security.
Optimistic Rollup: Use fraud proofs to intercept invalid transactions and punish verifiers who allow these fraudulent transactions to pass.
Validium: It chooses to put Layer-2 transaction data off-chain, which has high scalability. It uses zero-knowledge proof to avoid the executor from providing invalid status and reduce the consequences of the executor not disclosing the data.
In August of this year, dYdX announced that it had reached a cooperation with StarkWare, a blockchain privacy solution provider, to expand its products and integrate its Layer-2 expansion technology into dYdX’s perpetual contract products, which will enable greater improvements in the product, such as Reduce transaction costs by more than 100 times; instant user interface design makes mining transactions do not need to wait, you can keep your own funds; the use of cross margin can greatly improve the efficiency of guarantees; by placing the price oracle machine on Layer-2, There will be more performance index prices and higher leverage. In the future, through the establishment of Layer-2, we hope to provide customers with a better trading experience and better products.
dYdX focuses on becoming one of the largest and most technologically advanced exchanges in the world. dYdX systematically creates a deep infrastructure, intuitive user interface and easy-to-operate user experience, and adopts an international approach to promote customer growth. Based on dYdX’s team and technology, we firmly believe that dYdX will become one of the most potential DEX in the future.
In the future, we can join the growth of dYdX together-this KOL Ambassador Program is limited to 20 places, and the most ambitious and dedicated participants will be selected from the community.
dYdX welcomes professionals and institutions in various blockchain fields to join, especially BTC futures trading and high-leverage community and topic participants. To this end, we provide the following benefits to recruit volunteers to build the community together:
1. No minimum transaction limit;
2. Participants can invite through the personal exclusive invitation link, and receive generous transaction fees and commissions and exclusive discounts for the invitees;
3. All transaction fees and interest are based on transaction behavior, no transaction behavior will result in no expenditure and interest;
4. Payment method monthly settlement, settlement to the bound ETH address in USDC;
In the future, we look forward to more participants’ participation and suggestions to build dYdX together with us. At the same time, we also hope that more benefits will be provided to platform participants.
Click the official website link for more details https://trade.dydx.exchange/
Scan the code or click the link below to join the dYdX KOL Ambassador Program