What is dYdX (DYDX)?
dYdX is a decentralized cryptocurrency exchange that runs on Ethereum and does not have a centralized trading control node. On the platform, you can exchange, borrow and use margin trading with perpetual contracts.
Where do dYdX come from?
The dYdX platform was launched back in 2017 and has since proven itself to be the best. Many institutional investors, foundations and individuals have provided long-term support to the project. The company has assembled an experienced team of consultants, developers and blockchain architects.
The developers aimed to create a decentralized protocol for margin trading and an expanded range of functions that were not previously available on DEX platforms. After five years, it's safe to say that the developers have achieved their goal.
The dYdX protocol is one of the first in the Ethereum ecosystem to implement decentralized margin trading tools, including cross-margin trading. In this way, the developers are trying to transfer to the decentralized platform trading tools that are usually found in traditional markets such as FOREX and stocks.
How does dYdX work?
The dYdX platform is based on a hybrid approach that helps create a truly efficient marketplace. The blockchain system is used exclusively for settlements.
Like most financial products from decentralized platforms, dYdX is readily available for use and development. All user assets are fully managed, launched and stored by smart contract applications. This approach avoids the involvement of a third party in operations, which significantly increases the efficiency and safety of the platform.
The dYdX decentralized platform is open source, transparent and free to use. At the same time, you can work on the platform without registering and filling out the KYC procedure.
The dYdX protocol includes three main trading propositions:
- spot trading.
- margin trading.
- perpetual contract trading.
A separate account is used for each type of trading.
The set of tools is still very limited, but the creators of the platform are working on this and promise to significantly expand the list of tools available for work in the future.
One of the main features of the dYdX platform is the ability to trade on margin. Prior to dYdX, this feature was only available on centralized platforms. Some of which provided leverage up to 1: 100. On the dYdX platform, leverage was initially limited to 1: 5. Later, for some instruments, it was increased to 1:25.
In margin trading, a trader borrows an asset and immediately exchanges it for another asset. The borrowed asset must then be later returned to the lender with a specified interest.
In margin trading, traders can use both long and short positions and using leveraged funds:
- In a short position (sale), the investor borrows an asset and subsequently sells it for another asset. The investor makes a profit if the asset declines because it is cheaper to re-purchase the asset to pay the lender than the price at which it was originally sold. If the price rises, then the investor loses money and takes a loss.
- In a long (buy) position with leverage, the investor borrows an asset and uses it to buy another asset. An investor makes a profit if the price of an asset rises, and loses money if its price decreases. The profit and loss for a position is equal to the change in the price of the underlying asset multiplied by the leverage ratio.
What makes dYdX unique?
Dydx is unique in many ways. In addition to margin trading, users can earn passive income while the supported assets are on the exchange. Your capital provided on dYdX collects interest even if it is in an active trading position. This strategy gives you additional rewards for using the network.
As DEX, dydx offers a wide range of top quality products. The network features spot markets with competitive commissions. Users can open long or short positions with leverage. Dydx currently offers unlimited margin lending.
In fact, the dYdX platform was the first to offer users tools and functions that were previously only available on centralized sites. The platform has a similar interface and good user experience.
At the same time, the project does not stop there, but continues to develop further. New products are offered to users. To enable cheaper and faster trading, dYdX perpetual contracts are deployed on StarkEX, an Ethereum scalability solution developed by Starkware. At the same time, spot and margin trading remain at the 1 Ethereum level.
An important benefit of dYdX is that you can use your perpetual contracts to speculate on assets that are not on the Ethereum blockchain. For example, you can trade contracts based on Cardano, Solana and others.
Where to buy dYdX?
On August 3, 2021, the platform announced the launch of its own governance token. Given the popularity of dYdX, the site's own token quickly gained popularity. After listing on the leading cryptocurrency exchanges, DYDX has risen in price by more than 1000%.
Now you can buy dYdX on many exchanges. This makes it much easier to invest in dYdX in Kenya.
Also, the token is included in the list of traded instruments by brokerage companies. Amid the growing popularity of the digital finance market, brokerage companies are actively adding CFDs on cryptocurrencies. When trading CFDs, you can not only buy dYdX, but also sell dYdX.
How to Buy dYdX (DYDX)?
First, you need to decide on a strategy.
There are two most popular strategies for working in the financial markets - investing and trading.
The first implies the acquisition of an asset and long-term storage.
The second is short-term speculation. A trader makes many transactions with digital assets, trying to get profit in a short period of time.
Depending on the chosen strategy, there are two main ways to buy dYdX.
To invest in dYdX, you should opt for one of the cryptocurrency exchanges, where you can physically purchase an asset and subsequently transfer it to storage in your cryptocurrency wallet.
With this approach, cold cryptocurrency wallets should be preferred. They provide more protection for your assets. This is important considering that you are going to store them for a long time.
To trade dYdX, you should opt for a brokerage company. They have a number of advantages over cryptocurrency exchanges. They work directly with fiat money, provide greater reliability and high-quality round-the-clock technical support, provide good trading platforms and the ability to work on one trading account with various types of assets (Forex, CFD).
How to start investing in dYdX in Kenya?
Invest in dYdX in Kenya will not be difficult for you. You can choose the most suitable cryptocurrency exchange for you and start invest in dYdX right now.
If you still prefer trading rather than long-term investments, then you should opt for one of the brokerage companies. They work with clients all over the world. Therefore, you can quickly open a trading account and buy dYdX in Kenya.
An important advantage of brokers is the fact that they work with both fiat money and cryptocurrency. Therefore, you can easily and quickly replenish your trading account from a card or a popular payment system. You can also withdraw profit directly to the card or the selected payment system.
Is it safe to invest in dYdX online?
Any investment carries risks. You must be aware of this. Therefore, for trading or investing, it is always worth allocating those funds that you do not mind losing.
There are trade and non-trade risks in the market.
For example, a hacker attack on a cryptocurrency exchange can be attributed to non-trading risks. Such incidents occur regularly and many users lose money. You can only partially control these risks by choosing more reliable exchanges or methods of storing cryptocurrency.
In this aspect, online investments in dYdX through brokerage companies are safer. They are less vulnerable and provide greater security for your funds.
Is dYdX a good investment?
In terms of long-term investment, dYdX can be considered a good investment. The platform continues to actively develop, increasing the number of attracted customers and trade turnover.
The company's management sets itself ambitious goals and objectives, which it gradually tries to achieve. All this creates a good basis for the growth in the value of DYDX in the long term. Therefore, your investment in DYDX can bring you a good return.
Should traders invest in dYdX?
Of course, traders should take a closer look at the DYDX token. It will be of interest not only to long-term investors, but also to ordinary traders.
DYDX token has less volatility than other cryptocurrencies, which reduces risks, especially when trading on margin.
Also, the token is quite popular and is gradually being added to the lists of trading instruments of brokerage companies. Therefore, it has become easier to buy dYdX in Kenya. If you are not familiar with the cryptocurrency market, and it seems difficult for you, you can easily open an account with a brokerage company and trade dYdX.
How to Buy dYdX right now?
Everything is very simple.
The first step is to decide on a trading strategy (investing or trading).
The second step is to choose an exchange or a brokerage company (depending on the chosen trading strategy). If you have chosen long-term investment in dYdX, then you should opt for the exchange. If you want to trade dYdX, choose a brokerage company.
The third step is to fund your trading account. The process of replenishing a trading account on an exchange and in a brokerage company is different. Many exchanges do not work with fiat money. Therefore, in order to replenish a trading account, you must first buy another cryptocurrency on an exchange or exchange platforms. With a brokerage company, you can instantly fund your account directly with traditional money.
The fourth step is to buy dYdX.
Before you start trading on a live account, you need to start with a demo account. Even if you are an experienced trader and have traded on Forex before, you still need to work on a demo account for some time.
The cryptocurrency market differs from traditional market instruments in greater volatility. Also, some cryptocurrencies have other features. All this is necessary to study and test your trading strategy on new instruments.
Not all cryptocurrency exchanges provide a demo account opening service. Therefore, the easiest way is to start getting to know cryptocurrencies and opening a demo account with a brokerage company. It is both easier and faster. You can try your hand not only in cryptocurrency trading, but also in other trading instruments.
Brokerage companies and cryptocurrency exchanges are now working with clients all over the world. There are country-specific exceptions, but generally Kenya is not included. Therefore, there should be no problem opening a real account and buying dYdX in Kenya.
The process of registering accounts on many cryptocurrency exchanges is different, but in general it is not a complicated procedure and will not take you much time.
Registering a real account with a brokerage company is even easier. At the same time, all trusted brokers provide customers with high-quality technical support and specially trained managers who will help you open an account, replenish it and start trading.