Checking Out dYdX, The Protocol for Decentralized Financial Derivatives

in bitcoin •  last year 

dYdX is a protocol for decentralized financial derviatives.

It caught my eye as it’s backed by some notable VC firms including Andreessen Horowitz and Polychain Capital.

Let’s see what it’s all about.

dYdX a set of protocols that allow several types of financial derivatives to be created, issued, and traded for any ERC20 token.

That means with dYdX you can do short sells and options trading.

With short sells you can short assets to profit on the price decrease and earn interest on long positions through trustless loans.

With options you can write, buy, or trade any option on any token. You can also take complex financial positions to increase leverage or reduce risk.

The dYdX protocol uses the Ethereum platform and the 0x Protocol to operate. The financial derivatives are executed with Ethereum smart contracts and the 0x protocol is used for trade execution.

The way the 0x protocol works is that it’s a liquidity protocol with off-chain order relays and on-chain settlement. In other words, orders are handled off-chain and only settled on-chain. dYdX believes this solution will create the most efficient markets.

dYdX also plans to have a decentralized governance and upgrade mechanism so the protocol can be continuously improved.

There doesn’t seem to be much detail yet on if dYdX will have a native token.

This could be a huge opportunity. The estimated size of the derivatives market is $1.2 quadrillion!


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nice post i like this

Many times later go back

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Cheers!

Great contribution.
Excellent work.
Thanks for shear it.

Happy Steeming.

Awesome blog sir thanks a lot have a great day sir.

Very informative content sir @g-dubs. Thanks for sharing the valuable content with us.

Coins mentioned in post:

CoinPrice (USD)📈 24h📈 7d
BTCBitcoin8789.510$5.55%9.79%
ETHEthereum601.744$4.99%20.08%
LTCLitecoin149.425$2.13%17.75%
ZRX0x0.903$-2.02%26.44%

Thanks a lot sir this is informative post have a great day.Isn't it in a way doing the same thing as the lightning network? If orders are handled off-chain but settled on-chain, that' pretty much what lightning network is designed to do to speed up massive amount of transactions. Or am I wrong here?

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LN is similar but would need to build the infrastructure to do financial derivatives as well.

Another great initiative...

great Protocol

The related service with cryptocurrency is gradually wide .

Wonderful crypto news.
Thanks for sharing @g-dubs

Isn't it in a way doing the same thing as the lightning network? If orders are handled off-chain but settled on-chain, that' pretty much what lightning network is designed to do to speed up massive amount of transactions. Or am I wrong here?

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ZRX does the off-chain order book. dYdx is setting up the protocol and smart contracts for the different types of trades. I suppose the same thing could be done on LN, if someone builds it.

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Oh, I see. Thank you!

You got a 1.60% upvote from @postpromoter courtesy of @g-dubs!

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Thanks a lot sir this is informative post have a great day.

This is awesome update sir thanks a lot for sharing.

This post has received a 0.96 % upvote from @booster thanks to: @g-dubs.

This is amazing article sir thanks a lot for sharing have a great day.

More and more dapps are working with this kind of off-chain and on-chain hybrid system, and I think it's really a brilliant idea. Another great project to watch, thanks!

No doubt it is a very interesting post, thanks