How To Buy dYdX (DYDX)?

A common question you often see on social media from crypto beginners is “Where can I buy dYdX?” Well, you’ll be happy to hear it is actually quite a simple and straightforward process. 

Step 1: Create an account on an exchange that supports dYdX (DYDX)

First, you will need to open an account on a cryptocurrency exchange that supports dYdX (DYDX).
We recommend the following based on functionality, reputation, security, support and fees:

In order to sign up, you will need to enter some basic information, such as your email address, password, full name and, in some cases, you might also be asked for a phone number or address.

Note: On specific exchanges, you might need to complete a Know Your Customer (KYC) procedure in order to be able to purchase cryptocurrency. This is most commonly the case with licensed and regulated exchanges.

Step 2: Deposit funds into your account

Many cryptocurrency exchanges will allow you to purchase dYdX (DYDX) with fiat currencies, such as EUR, USD, AUD and others. Furthermore, they will also provide you with multiple deposit methods through which you can fund your fiat account, such as credit and debit cards, ewallets or direct bank transfers.

Note: Some payment methods will have higher fees than others, such as credit card payments. Before funding your fiat account on your chosen exchange, make sure to do your due diligence to find out the fees involved with each payment method to avoid unnecessary costs.

Step 3: Buy dYdX (DYDX)

This process is similar across almost every cryptocurrency exchange. All you have to do is find a navigation bar or a search bar, and search for dYdX (DYDX) or dYdX (DYDX) trading pairs. Look for the section that will allow you to buy dYdX (DYDX), and enter the amount of the cryptocurrency that you want to spend for dYdX (DYDX) or the amount of fiat currency that you want to spend towards buying dYdX (DYDX). The exchange will then calculate the equivalent amount of dYdX (DYDX) based on the current market rate.

Note: Make sure to always double-check your transaction details, such as the amount of dYdX (DYDX) you will be buying as well as the total cost of the purchase before you end up confirming the transaction. Furthermore, many cryptocurrency exchanges will offer you their own proprietary software wallet where you will be storing your cryptocurrencies; however, you can create your own individual software wallet, or purchase a hardware wallet for the highest level of protection.

For more in-depth instructions, our ‘Absolute Beginner’s Guide To Cryptocurrency Investing‘ will take you through the process step-by step. In addition to providing instructions for sending and receiving your cryptocurrency.
And if you’re completely new to crypto our beginner, intermediate and advanced level articles will get you up to speed with everything you need to know about the cryptocurrency space starting out. 

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What Is dYdX (DYDX)?

The rise of blockchains has enabled anyone to own and transfer assets across an open network without needing to trust any external parties. Unlike existing financial architecture, blockchains are freely and
equally available worldwide. This has led to a large and rapidly increasing number of digital assets existing on the blockchain. Many centralized and decentralized platforms designed to facilitate the efficient exchange of these assets already exist, and more are in development. Such platforms allow investors to take long positions in various assets. However, it is currently very difficult or impossible to take more complex financial positions.
dYdX allows creation of entirely new asset classes which derive their value from underlying blockchain-based assets. Financial products such as derivatives and margin trades allow investors to achieve superior risk management with their portfolios, and open up new avenues for speculation. They also increase market efficiency for the underlying asset by aiding in price discovery and allowing individuals to express more complex opinions on price and volatility. dYdX provides advantages over traditional financial products by eliminating the need for a regulated central clearing house, providing global and equal access, and allowing users full control of their funds at all times.

dYdX allows any standard buy/sell decentralized exchange to be used. This is done by wrapping external decentralized exchange smart contracts in another contract that provides standard interface to Margin. The wrapping contract is known as an ExchangeWrapper. The ExchangeWrapper is specified by the trader for each margin trade and requires no special permissions. This means anyone can write, deploy, and use an ExchangeWrapper for any decentralized exchange. dYdX has implemented the first ExchangeWrapper which wraps the 0x Exchange Contract, and allows any 0x order to be used to open a dYdX position.

DYDX is a governance token that allows the dYdX community to truly govern the dYdX Layer 2 Protocol (“the protocol”). By enabling shared control of the protocol, DYDX allows traders, liquidity providers, and partners of dYdX to work collectively towards an enhanced Protocol.

DYDX enables a robust ecosystem around governance, rewards, and staking — each designed to drive future growth and decentralization of dYdX, resulting in a better experience for users.

Staking pools are designed to promote liquidity and safety on the Protocol. Rewards programs for trading, liquidity providing, and past usage of dYdX will help drive growth and adoption of dYdX.

How does dYdX work?

Instead of individual borrowers and lenders making and accepting loan offers, everyone interacts in one “global lending pool.” Each asset has its own lending pool managed by smart contracts so withdrawing, borrowing, and lending can happen at any time without needing to wait for matches or sufficient capital. The interaction between borrowers and lenders–demand and supply–determine the interest rates of each asset. 

The dYdX Margin Trading protocol uses one main Ethereum Smart Contract to facilitate decentralized margin trading of ERC20 tokens. Lenders can offer loans for margin trades by signing a message containing information about the loan such as the amount, tokens involved, and interest rate. These loan offers can be transmitted and listed on off-blockchain platforms.

Who Invented dYdX?

The dYdX protocol was founded in 2017 by Antonio Juliano, an ex-Coinbase and Uber engineer. 

dYdX Features

Perpetuals on Layer 2 – https://alpha.dydx.exchange/

• Perpetuals trading with up to 25x leverage

• Pairs offered: BTC-USD, ETH-USD, LINK-USD, and more

• For a complete list of supported pairs, please visit: https://help.dydx.exchange/en/articles/4800587-perpetual-contract-specs

Spot / Margin Trading on Layer 1 – https://trade.dydx.exchange/margin

• Currently one of the highest volume and most liquid DEXs

• Spot trading + Margin trading with up to 5x initial leverage (Pairs offered: ETH-DAI, ETH-USDC, and DAI-USDC)

Borrowing on Layer 1 – https://trade.dydx.exchange/borrow

• Currently support ETH, DAI, and USDC

• Minimum starting account collateralization of 125%, which must be maintained above 115% to prevent liquidation

• Borrow directly to your wallet

Lending on Layer 1 – https://trade.dydx.exchange/balances

• Deposit funds into your Margin or Spot Account to start lending funds to the protocol

• Currently support ETH, DAI, and USDC

• No waiting period for matching

• No minimum loan period

• Interest starts accruing immediately and is paid out every block

• Rates are dynamic and based on utilization

DYDX development updates in 2023

dYdX has made significant strides in its development throughout 2023, marked by key milestones and updates. Here are some of the notable developments:

• Governance Proposals and Token Allocation: The dYdX community has actively participated in governance, deciding on important aspects like treasury allocation and distribution of reward programs. Five governance proposals were passed, resulting in an increase in $DYDX available to the community. These changes aimed at reducing emissions and increasing the five-year allocation of the community treasury by 19.2%, with 24.2% of the token supply accruing to the community treasury and rewards treasury over five years​​.

• Preparation for dYdX v4 Launch: dYdX has been gearing up for the potential launch of the dYdX v4 chain. Significant efforts include coordinating with the ecosystem for a successful launch and incorporating dYdX Operations Services Ltd. to streamline operations. The community has been preparing for this launch, which will bring about a proof-of-stake blockchain network requiring a Layer 1 protocol token for staking to secure the chain and govern the network​​.

• Focus on Transparency and Regulatory Arbitrage: dYdX has emphasized transparency and security as a key differentiator from centralized exchanges. This approach provides assurances against misuse of funds and enhances trust among users. Additionally, dYdX has navigated regulatory landscapes by making its services available in various jurisdictions, excluding places like the U.S. and Canada​​.

• dYdX v4’s Open-Source Code: The dYdX team has open-sourced the code for its upcoming v4 upgrade, transitioning the exchange from Ethereum to its application-specific blockchain using the Cosmos SDK. This move is part of a larger plan to decentralize the dYdX orderbook and matching engine, allow permissionless addition of new market pairs, and distribute transaction-fee revenue to token holders​​.

• Community and Ecosystem Growth: The dYdX Foundation has focused on fostering the development of the dYdX protocol and growing the community in preparation for the dYdX Chain release. This includes the launch of a Decentralized Autonomous Organization (DAO) and significant participation in governance proposals. The trading volume for the dYdX v3 protocol surpassed $230 billion, with a daily volume of $1 billion, and the platform recently exceeded $1 trillion in cumulative trading volume​​.

These developments underscore dYdX’s commitment to enhancing its decentralized exchange, fostering community-led governance, and preparing for the next stage of its blockchain infrastructure.

Official website: https://dydx.community/dashboard

Best cryptocurrency wallet for dYdX (DYDX)

There are plenty of different crypto wallets available. The best one for you depends on your general trading habits and which provides the most security in your situation. There are two main types of wallets: hot storage wallets (digital) and cold storage or hardware wallets (physical). Both have their pros and cons, and there is not necessarily a right or wrong answer when it comes to figuring out which crypto wallet is best for you.

HOW DO I DECIDE WHICH cryptocurrency WALLET TO USE for DYDX (DYDX)?

Deciding which type of wallet to use depends on a variety of factors, including:

• How often you trade. In general, hot wallets are better for more active cryptocurrency traders. Quick login ability means you are only a few clicks and taps away from buying and selling crypto. Cold wallets are better suited for those looking to make less frequent trades. 
• What you want to trade. As mentioned earlier, not all wallets support all types of cryptocurrencies. However, some of the best crypto wallets have the power to trade hundreds of different currencies, providing more of a one-size-fits-all experience.
• Your peace of mind. For those worried about hacking, having a physical cold wallet stored in a safe deposit box at the bank or somewhere at home, provides the safest, most secure option. Others might be confident in their ability to keep their hot wallets secure.
• How much it costs. It is important to investigate the costs associated with each wallet. Many hot wallets will be free to set up. Meanwhile, cold wallets, like any piece of hardware, will cost money to purchase.
• What it can do. While the basics of each cryptocurrency wallet are the same, additional features can help set them apart. This is especially true of hot wallets, many of which come with advanced reporting features, insights into the crypto market, the ability to convert cryptocurrencies and more. Security features can also be a good differentiator.

For a more in-depth overview of cryptocurrency wallets visit our “Cryptocurrency Wallets Explained” guide.

If you’re going to be dealing in larger volumes of crypto, investing in cold storage might prove advantageous.
Most widespead examples of this being the Ledger Nano and the Trezor.

Ledger manufactures cold storage wallets designed for users who want increased security. Their wallets are a physical device that connects to your computer. Only when the device is connected can you send your cryptocurrency from it. Ledger offers a variety of products, such as the Ledger Nano S and the Ledger Nano X (a bluetooth connected hardware wallet).

Trezor is a pioneering hardware wallet company. The combination of world-class security with an intuitive interface and compatibility with other desktop wallets, makes it ideal for beginners and experts alike. The company has gained a lot of the Bitcoin community’s respect over the years. Trezor offers two main models – The Trezor One and Trezor Model T (which has a built in touch screen).