Andreessen Horowitz-backed DeFi Exchange, dYdX, Rolls Out BTC-USDC Perpetual Contracts
dYdX, one of the leading Ethereum based DeFi's, has released its BTC perpetual contracts for trading to the public. This initiative was initially under a private alpha testing phase but will now be fully integrated with Ethereum's DEX ecosystem. However, the perpetual contracts are not available for U.S investors.
According to an earlier publication in April, the contract is the first of its kind within the dYdX decentralized exchange. Following this launch, the private alpha appears to have been successful hence the bold step to introduce Bitcoin's liquidity in the form of a perpetual contract. Antonio Juliano, the founder of dYdX, has since told Coindesk in a private message that this is a big milestone in the world of crypto derivatives,
“For the first time, users can trade the most popular financial product in crypto – BTC perpetual contracts – on a decentralized exchange,”
dYdX BTC Perpetual Contracts
Complex financial products seem to spill over for replication in the upcoming crypto market. Today, crypto exchanges have evolved from simple trading to products like spots and futures whose underlying are digital currencies. Perpetual swaps in the dYdX non-custodial exchange will further diversify investors' options in the crypto derivatives market.
Basically, the assets have no expiry dates like normal future contracts hence the whole idea of ‘perpetuity'. Margin differences in the dYdX BTC perpetual contracts will be settled in USDC, a USD backed stablecoin.
However, the DEX plans on adding more pairs in the near future. Notably, dYdX offers up to 10x leverage on the perpetual contracts as it looks to hit a$10 million daily traded volume by the end of 2020. A post by the firm has echoed that the private alpha already recorded impressive numbers,
“To date, almost $5M has been traded since going into Alpha, with $3M of that coming since Sunday. We are excited to launch our Perpetual Markets to the public, and gather additional feedback from our community.”
With such progress, dYdX could gradually become a threat to big boys like BitMEX and Binance who have long dominated this market. The platform's decentralized advantage means that individuals get to execute and audit on-chain as opposed to centralized exchanges where such confirmations are not an option. dYdX also said that it will be scaling the scope of its perpetual market in the coming months to feature other prominent cryptocurrencies as well.