Decentralized derivatives exchange dYdX has proven to be an early star for Ethereum in recent times. That reality was driven home anew this week as trade volume around dYdX’s new perpetual bitcoin swap offerings exploded.
Last month, the dYdX first unveiled its Perpetual Contract Markets system, and the release’s first offering was a bitcoin perpetual swap contract that offered up to 10x leverage indefinitely in the BTC-USDC market.
That alpha bitcoin perpetual swap offering went public on May 13th, 2020, and since then dYdX has seen an acute surge around its trading volumes. As the dYdX team said on the launch:
“dYdX is building a world-class BTC trading product — not just for DeFi, but for the broader crypto market. Traders prioritize liquidity, functionality and the security of their funds, making dYdX the ideal platform to start trading BTC.”
Just as projected, then, the dYdX platform has seen a major influx of new trading activity around its BTC products. To this end, users are starting to come around to the platform’s novel possibilities.
dYdX Volume Surges
On Tuesday, May 19th, the daily trading volume on dYdX surpassed the $17 million USD mark. For comparison, the closest challenger on the day was decentralized exchange darling Uniswap, which facilitated more than $10 million in trades on Tuesday.
What’s notably here is that dYdX even acutely flipped Uniswap when it comes to daily volume. In recent weeks, Uniswap’s been basically unchallenged when it comes to daily and monthly trading volume metrics.
Accordingly, for dYdX to start pulling in major volume over Uniswap this week means that dYdX currently has things really attractive going for it, e.g. the platform’s new trustless bitcoin perpetual swap offering.
Yet don’t think the dYdX builders didn’t see this explosion of popularity coming. As dYdX founder Antonio Juliano noted earlier this year:
“Perpetuals give users an easy and capital efficient way to get leveraged long or short exposure. We expect this trend to apply to DeFi as well, and for the trading volume of decentralized perpetuals to quickly surpass all spot DeFi trading volume.”
If that dynamic plays out, then it’s icing on the cake for dYdX, which is already one of the most profitable DeFi platforms in the Ethereum ecosystem. If dYdX’s builders can continue to roll out novel derivatives that don’t have traditional analogues, the platform has a strong chance to continue winning over lots of new users in the years ahead.
dYdX is a decentralized application, which means it runs all day and all night, so long as Ethereum is running … and mind you, Etherum has perfect uptime for all intents and purposes.
With that said, dYdX is accessible at all times for millions of users around the world. But the platform’s more centralized competitors can’t boast such extensive accessibility.
For example, on May 19th BitMEX, one of the largest centralized bitcoin derivatives exchanges in the world, saw its trading engine go down. The massive outage was obviously hugely consequential to thousands of global traders. In its wake, the BitMEX team said:
“We can confirm all funds are safe, delayed orders will be rejected, and no liquidations will occur during the downtime. On coming back online, there will be a cancel-only period initially.”
In this sense, this week dYdX served as a foil to BitMEX: dYdX worked excellently in decentralized fashion while an embattled BitMEX struggled as much as ever.
There is certainly plenty of room for both centralized and decentralized exchanges around Ethereum, but it is definitely notable that lately decentralized exchanges are starting to demonstrate more and more major advantages over their centralized counterparts. That could be a big deal going forward.