DeFi
DeFi exchange dYdX attracts investors with $41 billion trading volume – DL News
- DYdX stakeholders profit from trading fees during the crypto rally.
- The DeFi exchange has launched a network for traders playing BTC and ETH.
- Uniswap is considering a similar staking model.
With Bitcoin hitting new highs on a weekly basisdYdX participants earn hundreds of thousands of dollars in trading fees.
Participants in the decentralized perpetual exchange have earned a total of $460,000 on March 5This is the first time Bitcoin has surpassed its previous record high of $69,000.
Over the past 30 days, all dYdX participants have won a total of $5 million, according to data from Mint analysis. The fees were paid in USDC, Circle’s stablecoin pegged to the US dollar.
Tristan Dickinson, spokesperson for the dYdX Foundation, said DL News that the project hosted $41 billion in trading volume on the dYdX and dYdX v3 chain over the past three weeks.
During the same period, Bitcoin and Ethereum climbed 51% and 60%, respectively.
Pairs trading
And with crypto markets showing no signs of slowing down, these fees for investors are expected to continue to rise.
DYdX typically handles around $1 billion in trading volume per day across 54 different trading pairs, according to CoinGecko.
Due to the design of dYdX’s new bespoke blockchain network, 100% of the dYdX chain’s protocol fees go to the dYdX chain’s stakeholders, Dickinson said.
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Launched in 2017 on the Ethereum blockchain, dYdX quickly gained popularity but ultimately ran into network limitations.
Cryptocurrency trading on Ethereum is often too expensive and slow to compete with centralized exchanges like Binance or Coinbase.
To meet demand, dYdX launched an independent chain in November using tools from another blockchain network called Cosmos.
Validators
Now, dYdX has native staking and its own group of validators – the machines that help verify crypto transactions. Users can stake the network’s native dYdX token with any validator.
The project is maintained by four entities: the dYdX Foundation, dYdX Trading Inc., the dYdX Grants subDAO, and the dYdX Operations subDAO.
A DAO, or decentralized autonomous organization, is an online group of token holders who can vote and make proposals to change a crypto protocol or approve grants.
With negotiation costs now fully distributed to stakeholders, these four entities are funded by making proposals to their community and then, if those proposals are accepted, by drawing from the community treasury.
Dickinson explained that the $230 million in cash was accumulated through fees from previous versions of dYdX. The dYdX community approved a $30 million grant to the foundation in February.
“We’re moving toward this zone model where eventually everything will be completely controlled and governed by the community, and the funding will come from the Treasury,” Dickinson said.
Actors consider decentralized exchanges
Uniswap is another decentralized exchange that is mulling a similar model.
Calling his version of the model the “change of fees”, the Uniswap community questioned whether holders of its native UNI token should also be entitled to a share of the platform’s trading fees.
The initial temperature control proposal pass almost unanimously last week, moving him to the next stage of the governance process. Temperature checks are Uniswap’s first step in gauging community sentiment before making sweeping changes.
With daily trading volumes exceeding $3 billion and nearly $1.5 billion in accumulated fees, enabling this switch would undoubtedly benefit UNI token holders.
Correction: This story was updated on March 13 to correct an inaccurate trading volume figure provided by dYdX.
Liam Kelly is DL News’ Berlin correspondent. Contact him at liam@dlnews.com.