What is dYdX (DYDX)? | Sept 16

The dYdX Protocol Token (DYDX) is the governance token of the dYdX community that can be used to receive mining rewards, participate in staking pools, and receive trading discounts on the dYdX exchange.

How does dYdX (DYDX) work?

After side network Officially, the dYdX exchange has established itself as a major player in the crypto world as the platform provides a target for about 64,000 traders and reaches a total of $ 11 billion on the futures platform from dYdX liquidity pools.

In addition, the platform also cooperates with the Layer 2 scaling solution StarkWare. The company uses StarkEx, a scalable Layer 2 tool that aims to improve uncustody trading on dYdX. Put simply, the impact will be similar to the upcoming ETH 2.0 upgrade, with gas charges reduced to zero, minimum transaction sizes reduced, and lower transaction fees.

The purpose of dYdX is to provide secure transaction services with low cost and gas. To achieve this, the platform is now switching to Layer 2 with the help of StarkWare to increase transaction processing.

According to the official website, dYdX made such a decision because:

“Ethereum can process around 15 transactions per second (TPS), which is not enough to support the rapid growth of DeFi, NFT, etc. While Ethereum 2.0 will theoretically increase the network speed to 100,000 TPS, but will have to wait a little longer for the base to complete class expansion. Meanwhile, Layer 2 scaling solutions (in the form of rollups) liberate the base layer of Ethereum by reducing the execution load, resulting in lower gas charges and increased throughput without adding to the network load. The partnership between dYdX and StarkWare will combine STARK proofs for data integrity with on-chain data availability to ensure a completely unprotected log. ”

Unique features of dYdX (DYDX)

Mark out P.ool

The dYdX platform offers two types of staking pools.

– Safe pool: The secure pool works exactly as the name suggests and creates a secure network for users to set DYDX tokens. The secure pool ensures that DYDX users who have deployed tokens will continue to receive a reward in proportion to their share of the pool. However, users must wait 14 days before they want to withdraw the withdrawal and must submit a request before the current epoch (period) has expired.

– Liquidity pool: The liquidity pool has two main goals, namely a liquidity network effect and an incentive for professional market makers to invest in the platform. Market makers will create many new markets on the Layer 2 dYdX protocol and stakers will receive DYDX in proportion to the number of tokens used in the liquidity pool. You can cancel after the 14-day period and during the active epoch. Amber Group, Sixtant, Wintermute and DAT Trading Market Maker are currently on the Layer 2 dYdX protocol.

administration

DYDX holders can become part of the governance process and recommend changes to the Layer 2 protocol. Some of the changes DYDX Owners can vote on include:

– Determine payments to the vault pool in the event of loss or damage.

– Set risk parameters for Layer 2 protocols.

– Voting on the listing of new tokens for the Layer 2 protocol.

– management contracts.

– The market maker choice is added to the liquidity wagering pool.

Rewards for Holder DYDX

The dYdX platform offers three types of rewards for DYDX holders.

Retroactive mining rewards

Retroactive mining rewards are distributed to dYdX users who transact on dYdX’s Layer 2 protocol and to users who have long been using the platform.

The amount of rewards users earn depends on their overall activity level and level. Retroactive mining rewards can now be claimed after the original transfer restrictions were lifted.

Note that retrospective mining is not available to US users due to government restrictions.

Trade bonuses

Trading rewards are distributed to motivate traders to use the layer 2 dYdX protocol. These rewards are also used to increase the popularity of dYdX and expedite market liquidity.

Any trader who trades using the Layer 2 dYdX protocol is eligible to earn the DYDX trading bonus. The amount of the reward depends on several factors, the most important of which are trading activity and volume.

Reward for liquidity providers

Users with an active Ethereum address can receive a reward for the liquidity provider if they maintained a minimum maker volume of 5% in the previous epoch. DYDX tokens are paid out to the liquidity provider after 28 days and the process takes 5 years. The main purpose of this type of bonus is to accelerate DYDX liquidity in the market over the long term.

Showcase Transaction fee

Discount rate for transaction fees by level

DYDX holders get a discount on the transaction fee based on the number of tokens they have in their wallet. For example, if a user holds ≥10,000 DYDX, they will receive a 15% discount on trading fees.

Token

A total of 1,000,000,000 DYDX will be distributed over a period of 5 years. Within:

– 50% of the tokens will be transferred to the dYdX community including liquidity providers, traders, stakeholders and users completing transaction milestones. Part of this section also goes to the community coffers.

– 27.73% of the tokens will be transferred to previously active investors.

– 15.27% tokens allocated to official dYdX team members including founders, consultants, employees and others.

– 7% of the tokens are reserved for future consultants and employees joining the platform.

New information is updated.

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