dYdX Chain leads the Decentralization Perptual Futures market

The competition in the decentralized Perptual Futures sector is becoming increasingly fierce, while dYdX continues to maintain its leading position. According to market data, even when only considering the performance of its second-layer network (v3 version), dYdX's trading volume still far exceeds that of other derivatives protocols. It is worth noting that the latest v4 version (i.e., dYdX Chain) launched by dYdX has trading volume that is already comparable to that of the v3 version, and is expected to further enhance its market potential with the push of various incentive measures.

The dYdX Chain officially launched on October 26, 2023, marking the platform's achievement of comprehensive Decentralization, including the order book and matching engine. This significant upgrade not only optimizes the trading experience but also introduces a new mechanism for distributing trading fees to DYDX token stakers.

Full Decentralization of dYdX Chain

Since its establishment in 2017, dYdX has undergone several important upgrades. From the initial margin trading protocol to the later order book-based trading system, and now to the independent blockchain, dYdX continuously innovates its technical architecture and business model. The current dYdX Chain uses Cosmos SDK and Tendermint PoS consensus mechanism, supporting the processing of 2000 transactions per second, greatly enhancing system performance.

Compared to version v3, the dYdX Chain has achieved a qualitative leap in terms of Decentralization. In version v4, the platform's front end is operated by a dedicated SubDAO, the order book and matching engine are managed by globally distributed validators, and the launch of new tokens is also decided through on-chain governance, truly realizing a decentralized operating model.

Innovation in Profit Distribution Mechanism

All fees generated on the dYdX Chain are currently allocated to validators and stakers, mainly consisting of trading fees denominated in USDC and a small amount of gas fees. These earnings accumulate by block, with an average of one block produced every 1.08 seconds, and users need to manually claim their rewards.

Recent data shows that a total of 2.51 million USDC and 126 DYDX rewards were distributed in the past 30 days. Users can earn yields by staking DYDX to active validators, of which there are currently 60 on the platform. The staking yield has performed remarkably, with an average annualized yield of 14.97% over the past 30 days, peaking at over 29%.

To further enhance user experience, a certain hardware wallet has integrated with Keplr, allowing users who store funds in the hardware wallet to conveniently participate in staking and other operations. Additionally, liquidity staking service providers in the Cosmos ecosystem have also launched related services for DYDX, providing users with more flexible staking options.

Multiple Incentive Measures Promote Growth

The trading volume of the dYdX Chain has rapidly increased, largely due to a series of incentive measures introduced by the platform. Official data shows that the v4 version has already surpassed v3 in certain key metrics, such as 24-hour trading volume and number of orders.

To encourage users to migrate from v3 to v4, the dYdX DAO has authorized the launch of a 6-month incentive program worth a total of $20 million in DYDX tokens. This program is divided into multiple phases, each of which will be optimized based on user feedback. In addition to basic trading and market-making rewards, innovative mechanisms such as performance rewards have been introduced to attract and retain high-quality traders.

In addition, dYdX Chain offers competitive trading fee discounts. For market makers, the maximum long-term fee is only 0.01%; for takers, the maximum fee is 0.05%, which is overall lower than that of mainstream centralized exchanges.

The platform is continuously optimizing user experience, supporting various wallet and cross-chain deposit methods, and plans to introduce native USDC support to further simplify the deposit process. In the dYdX Chain environment, the smoothness of market order trading has also been significantly improved.

Summary

As a leader in the decentralized Perpetual Futures market, dYdX has made significant breakthroughs in decentralization, revenue distribution mechanisms, and user experience by launching the brand new dYdX Chain. With the continued advancement of various incentive measures, dYdX Chain is expected to further consolidate its market leadership and promote the popularization and development of decentralized derivatives trading.