Pro

Analyzing DYDX Tokenomics

Tom DunleavyFeb 1, 2023 ⋅ 8 min read

Key Insights

  • dYdX is the market-leading decentralized exchange for perpetual contracts, based on volume and users.
  • dYdX accrues less revenue for tokenholders than the ascending GMX, despite a sizable difference in trading volume. Additionally, GMX revenue is routed back to tokenholders, while dYdX revenue is directed to a private entity.
  • dYdX can increase the attractiveness of the token, and the security of its new network, by making a number of simple changes, including adjusting the fee schedule, implementing a smoother vesting period, increasing transparency, and creating new demand sinks, among other possibilities.

Perpetual swaps (perps) are the lifeblood of crypto trading. Perps are two-thirds of trading volumes compared to only one-third for spot volumes. dYdX is the most popular decentralized exchange (DEX) for trading perps. dYdX leverages StarkWare's Layer-2 to eliminate the need to trust a centralized exchange (CEX) while trading. Soon they will be moving to their own standalone Cosmos chain with the launch of dYdX v4.

dYdX utilizes a central limit order book model rather than the popular (within crypto) automated market maker (AMM) model, making it instantly familiar to anyone who has traded outside the crypto space. The dYdX model combines the security and transparency of a DEX with the speed and usability of a CEX.

Let us know what you loved about the report, what may be missing, or share any other feedback by filling out this short form. All responses are subject to our Privacy Policy and Terms of Service.
Get an edge with
Blockworks Intel
Upgrade For $4,500/Yr
Upgrade to unlock 300+ industry leading reports from our researchers, including:
Have questions?Schedule a Demo

Tom Dunleavy

47 Reportsdunleavy89

Tom is a Sr. Research Analyst at Messari. His primary focus is on Layer-1's as well as the relationship between traditional finance and crypto. Prior to joining Messari, Tom worked in Investment Consulting at Meketa and Investment Management at SSGA. Tom studied Finance at Bentley University and earned his CFA and CAIA Charters.

Mentioned Assets
Outline
  • Key Insights
  • Market Landscape
  • dYdX Tokenomics
  • Potential Solutions
  • Wrapping Up
Author
Tom Dunleavy
Tom is a Sr. Research Analyst at Messari. His primary focus is on Layer-1's as well as the relationship between traditional finance and crypto. Prior to joining Messari, Tom worked in Investment Consulting at Meketa and Investment Management at SSGA. Tom studied Finance at Bentley University and earned his CFA and CAIA Charters.
47 Reportsdunleavy89
Mentioned Assets