dYdX Becomes Largest DEX by Trading Volume Thanks to BTC Derivatives

Also, DXdao raises more than $1M in fundraiser, Idle Finance upgrade, tBTC bug update.

Hello Defiers! Yesterday, centralized crypto has a horrible day with BlockFi leaking users’ information (something that just can’t happen in DeFi because users control their data), while BitMEX was down. But DeFi kept growing. Here’s what’s up:

  • dYdX’s BTC perpetual swaps are surging

  • DXdao’s Decentralized fundraiser crossed $1M mark

  • Idle Finance upgrades platform

  • Keep releases details of tBTC pause

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dYdX’s BTC Perpetual Swaps are Mooning

By Lucas Campbell

DeFi traders are snatching up dYdX’s BTC derivatives, pushing the non-custodial trading platform to surpass Uniswap and become the leading decentralized exchange by trading volume. 

Volume for BTC perpetual futures contracts, which launched in April, surged by almost seven times to a record of $13M in daily volume yesterday, up from last week’s record of $1.9M. Total volume on dYdX reached $16M yesterday, or about $5M more than value trading hands on Uniswap. 

dYdX is one of the first DEX’s to offer BTC contracts for Ethereum’s growing DeFi ecosystem. Perpetual contracts have been popularized by centralized exchanges, allowing users to gain synthetic exposure to Bitcoin and other major crypto assets without an expiration date. BitMEX traded over $2.2B in daily volume and roughly ~$82.5B in monthly volume according to their ecosystem report in January, making perpetuals one of the most popular assets in crypto markets. Judging by dYdX’s early success, they’re on track to become the most popular assets in decentralized markets too. 

dYdX’s perpetual trading offers 10x leverage on BTC (long or short) with no expiry, and with settlement and margin in USDC.

Centralized exchanges dwarf dYdX and other DEXs in terms of volume ––ranked against centralized crypto exchanges, dYdX would come in 21st, right after Gemini. But the growth in dYdX’s perpetual contracts shows the increasing interest in DeFi protocols and products at large.

(Above) dYdX BTC Perpetual Swap Volumes. Data via Dune Analytics

dYdX and Uniswap are dominating the DEX sector. The next closest competitor is Kyber and IDEX with $2.7M and $2.1M, respectively.

(Above) Ethereum DEX volumes via DeBanked

While dYdX’s volumes have surged in the past few days, the platform has also seen significant, steady increases in trading over the course of the year. In January, dYdX’s average daily volume stood at roughly ~$834K. Fast forward to April and daily volume for the platform averaged nearly ~$4M, or an increase of almost 5x in less than four months. 

Even though dYdX currently leads trading volumes, Uniswap is still outpacing the platform in terms of annualized earnings. According to Token Terminal, dYdX is on track to reach around $2.25M in annualized revenue (which is directed to the platform’s development company) while Uniswap is estimated to hit $4.7M in earnings for liquidity providers. This is followed by Kyber and 0x - the two other major liquidity protocols - as they’re projecting to reach $2.20M and $1.08M in annualized earnings, respectively.   

For reference on how trading fees compare across major DEXs, Uniswap charges a fixed 0.3% trading fee, dYdX charges 0.15% - 0.50% for takers —with 50% off on trading fees for perpetual contracts until May 20, which could in part explain the high volume— while Kyber has reserve contributors paying a 0.25% fee and 0x fees are proportional to the gas price paid by the trader

(Above) dYdX Average Daily Volume and Projected Annualized Earnings. Data via Token Terminal 

The perpetuals boom is just getting started. Following BTC’s successful launch, the exchange plans to add ETH and Dai contracts, according to dYdX’s website.

If you’re interested in trading dYdX’s BTC perpetual swaps, our fellow Defiant Contributor - DeFi Dad - released a great tutorial on how to get started. 

DXdao Fundraiser Just Surpassed $1 Million

DXdao, an organization which has no hierarchy and is communally owned by more than 600 Ethereum addresses, yesterday crossed the $1 million mark in a fundraiser.

Idle Finance Upgrade Increases User Control Over Funds

Idle Finance, which automatically allocates user deposits across a number of lending protocols, has upgraded to give users more control over how their funds are invested.

Keep Releases Details on tBTC Deposit Pause

The Crypto Price-Innovation Cycle: a16z

“Even though crypto cycles look chaotic, over the long term they’ve generated steady growth of new ideas, code, projects, and startups — the fundamental drivers of software innovation. Technologists and entrepreneurs will continue to push crypto forward in the coming years. We are excited to see what they build,” Chris Dixon and Eddy Lazzarin wrote.

Crypto Chicks and DAOstack are hosting a virtual hackathon. Here’s the info:

Planet Wide SOS Hackathon -Solutions to Heal the World

Join Planet Wide SOS Hackathon to fund your ideas and solutions that help local communities (Anything Local Track) or create global remote platforms (Everything Remote Track). The prize fund is being raised and governed by the people from 40 countries via a digital decentralized coop The Builder Collective. Join to become a coop member with a voice to select which projects to fund. Open to all technologies, all countries, all genders. No programming experience is required - Top Business Ideas Awards are available. Diverse teams will be recognized with the Top Women-Led Teams Awards. Your solution matters - register to maximize your contribution and voice now at https://soshackathon.com!

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The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

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About the founder: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.