Decentralized exchanges propose an alternative to traditional exchanges in the cryptocurrency market in order to preserve the integrity of the market – the core value, which is decentralization. But decentralized exchanges did not rise to fame just because they fit with the blockchain technology’s principles, the reason behind the rise of DEXes is because of their value proposition. Traditional exchanges have intermediaries, they can be costly and inefficient. Decentralized exchanges provide a solution to all of that. While the DEX realm had been dominated by a few projects like Uniswap, PancakeSwap, other projects have also risen to popularity. Today, we will discuss dYdX – one of the most promising decentralized exchange.
What is dYdX?
dYdX is essentially a decentralized margin trading platform based on the blockchain of Ethereum. However, it is a lot more than just a decentralized exchange. Margin trading, options, and derivatives in the cryptocurrency market were reserved for centralized exchange but dYdX has broken the status quo by being the first DEX to offer these services as well. It has also managed to become the most popular decentralized platform for margin trading.
dYdX is trying to solve some key issues with the decentralized finance sphere in order to help it grow. It aims to increase the accessibility to the market by allowing anyone to use and build upon the protocol. Moreover, smart contracts ensure transparency in the exchange. Although the platform might not be able to reach the standards of centralized exchanges, it is one of the most advanced trustless and non-custodial financial platforms – and that is saying something, given the influx of projects into the crypto market.
Future outlook
dYdX had been under a lot of hype and rightfully so. The decentralized exchange was able to surpass Coinbase – one of the largest centralized crypto exchanges – and Uniswap – one of the largest decentralized exchanges – in terms of daily volume during the beginning of October. Being a new project, what dYdX was able to achieve in a brief period of time was nothing short of a feat. Moreover, the hype did not die down after the DEX came down in terms of daily volume. The exchange now operates in the top hundred largest cryptocurrencies by market cap.
The future trajectory for dYdX is expected to be going upwards. According to the estimates of Wallet Investor, the cryptocurrency is expected to be operating at a price level of $160 in a year’s time while the five-year price projection places it at $715. Digital Coin Price is not as bullish on the cryptocurrency and suggests a price of $68 by 2026.
