Mastering the Art of Developing a Decentralized Exchange like DyDx

The fast-paced crypto world witnessed an astounding quantum leap last year. Coinbase, which is one of the frontline crypto trading platforms, was left behind by a dark-horse DeFi venture named “DyDx”. Coingecko reported that DyDx generated 15% more trading volume over 24 hours than Coinbase generated. Coinbase made $3.7 billion and derivatives DyDx surpassed it by a trading volume of $4.3 million.

With all the frenzy around the potential of DeFi startup, many cryptopreneurs got interested in building similar platforms to benefit from all the rage. If you are one of the crypto entrepreneurs interested to develop a decentralized crypto exchange like DyDx, you will find all you need to know about DyDx in this blog.

What is DyDx Platform?

DyDx is an ethereum-based partially decentralized trading platform offering ample services such as lending, borrowing, leverage, and margin trading to professional traders. The platform leverages starkware level 2 scaling protocol that enables traders to trade without intermediaries.

History of DyDx

A non-profit organization named DyDx started this project. The startup headquartered in Zug, Switzerland had Arthur Cheong, Rebecca Rettig, and Markus Spillman as their board of directors. An ex-employee of Coinbase – Antonio Juliano was a significant figure who introduced the DyDx protocol to the masses.

In 2019, a huge fundraising event collected a freaking capital surpassing USD 10 million. An Initial Coin Offering (ICO) event accompanied the official launch of the groundbreaking decentralized cryptocurrency exchange project held on September 9, 2021.

Perpetual Trading on DyDx Platform

This type of trading takes place using smart contracts with no end dates. They facilitate the buy or sell of cryptocurrencies at any specified time in the future. Perpetuals are intended to match the current value of the base cryptocurrency. When an agreement takes place to conclude the contract, settlement occurs in preset cryptocurrency. DyDx platform allows traders to make up to 25X leverage on tokenized derivatives (also known as synthetic assets).

Layer 2 Solution Integration

Layer 2 solutions reside and work on the top of the core blockchain to improve the overall efficiency and slash the cost of transactions. They enable utter scalability to the underlying blockchain, allowing minimum trade sizes.

The alliance of Ethereum blockchain and starkware layer 2 solution is pivotal as it helps DyDx decentralized crypto exchange attain its ultimate objectives which are – secure, inexpensive trades on the platform.

Low Latency Off-Chain Set-Up

Besides the starkware layer 2 solution, DyDx also leverages an off-chain system with low latency to build and uphold the order book. It manages deleverages, transfers, liquidations, trades, and oracle price upgrades. It also validates the updates in balances owing to transactions.

Order Types in Perpetual Trading

DyDx, the perpetual trading supporting decentralized cryptocurrency exchange currently allows the following types of orders:

– Market Order

This type of buy/sell order takes place at the current market price specified by the order book at the time when the order is processed.

– Limit Order

This type of order entertains at a specific price limit. The buy order occurs when the price is lower than the limit whereas the sell order processes when the price is higher than the preset limit.

– Trailing Stop Order

This kind of order is a revision of the traditional stop-market order. The stop-price alters to mimic the index price according to a predetermined trailing percentage when the index price moves in the trader’s favor.

– Take Profit Limit Order

This order triggers when the profit price is achieved.

– Stop Limit Order

This order processes only when the index price surpasses a predetermined stop price.

Perpetual pairs on DyDx

In addition to the efficiency ensured by several technological protocols, perpetual contracts are a major center of attraction for customers in DyDx. Prioritizing the customers’ inclination for perpetual contracts, the decentralized crypto exchange supports a huge variety of pairs on the platform.

DyDx Token

One of the most significant components of the DyDx ecosystem is its native governance token, i.e. DyDx token. The in-platform ERC-20 token holders exercise supreme powers in the ecosystem. They are eligible to seize trading fee cutback, staking rewards, and policy make/change benefits.

DyDx total token supply amounts to 1,000,000,000 units, limited by a 5-year distribution period. Its current market cap on 25 February 2022 was $5,244,520.

Wrap-Up

DyDx hybrid exchange is an ideal platform for crypto traders seeking cryptocurrency trading platforms operating on a pure DeFi notion. The developers have ensured the full implementation of the DeFi protocol in all its mechanisms, which is why it has successfully attained the public’s interest at astonishing levels.

If you are interested to develop decentralized exchange like DyDx, now is the time to get in touch with Antier Solutions. We can help in DEX development based on your unique requirements.

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