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How to Start Trading on dYdX Chain: A Beginners Guide

Published

9 months ago

May 10, 2024

Coin2049 Newsletter

Trading platforms offer a variety of options for users, but few specialize in decentralized perpetual futures. dYdX stands out in this niche, providing users with an innovative platform for perpetual trading, characterized with high transaction speed, low fees and numerous possibilities for DYDX token holders. It is also perfectly suitable for newbie traders, simplifying the DeFi experience and making the transition from centralized exchanges seamless.

The recent developments in dYdX’s offerings make it an ideal choice for those looking to explore decentralized finance (DeFi) with ease. This guide is designed to help beginners navigate dYdX and its features, providing the essential steps needed to start trading.

What is dYdX?

dYdX is a decentralized perpetual exchange. Launched in 2018, it has established itself as a leader in decentralized perpetual trading through its combination of cutting-edge technology and affordability. The platform’s growth is supported by prominent venture capital firms and investors, including Andreessen Horowitz, Paradigm, and Polychain, among others.

In 2023, dYdX announced its migration from the Ethereum blockchain to the Cosmos ecosystem with the dYdX Chain. This transition marked a significant milestone for the platform, allowing for increased scalability, full decentralization, distribution of 100% of protocol fees to Stakers and higher throughput. The migration also enabled dYdX to implement a fully decentralized order book system and matching engine providing more control and precision for traders.

dYdX Chain is fully decentralized, so users can easily onboard using a variety of wallets or socials thanks to the Privy integration and aren’t required to complete Know Your Customer (KYC) checks. All you need is a funded crypto wallet or social account and you can start trading in a matter of minutes.

dYdX has established itself as a leading platform for perpetual trading of crypto assets. The platform’s average daily transaction volume consistently exceeds $1 billion, reaffirming its position as a significant player in the trading landscape. It has outpaced many decentralized trading platforms and competes with prominent centralized exchanges, demonstrating dYdX’s growing influence in the market.

How to Trade on dYdX?

Step 1: Getting Started

Before you begin trading on dYdX Chain, you need a compatible cryptocurrency wallet, e-mail or socials (X or Discord). Here’s how to set up a wallet:

Choose a Wallet: Popular options include MetaMask, Trust Wallet, and Ledger. Make sure your chosen wallet is compatible with dYdX on the dydx.trade interface. A hardware wallet like Ledger offers added security by keeping your private keys offline.
You can also set up a new wallet using Privy and log in using your existing email or social accounts. It doesn’t require memorizing a seedphrase — just choose a preferred log in method and click Authorize.

Install and Configure: Download and install the wallet app or browser extension, and set up your account by following the prompts. Make sure to securely store your recovery seed phrase. Never share this phrase with anyone, as it gives full access to your wallet.
Fund Your Wallet: Transfer some cryptocurrency, such as USDC, into your wallet. This is necessary for trading on dYdX Chain. Depending on your chosen wallet, you may need to purchase cryptocurrency from an exchange or transfer it from another wallet.

Step 2: Connect to dYdX

With your wallet ready and funded, it’s time to connect to dYdX Chain:

Visit dydx.trade — the front end user interface for dYdX Chain.
Connect Your Wallet or socials: Click the “Connect Wallet” button and select your wallet type. Follow the prompts to complete the connection. Ensure your wallet extension or app is open and ready for interaction.
Authorize: You’ll be asked to authorize transactions through your wallet interface. Make sure to review the details before confirming. This step ensures you understand and approve the connections and transactions taking place.

dYdX Chain is available for iOS: the same dYdX Chain trading experience you know and love — now directly in your pocket!

Download dYdX for iOS here.

Step 3: Explore the Platform

Once connected, you can explore dYdX Chain’s interface:

Dashboard: The dashboard provides an overview of your account, including balances, open positions, and trade history. This section also offers shortcuts to key functionalities, making it easier to manage your portfolio.

Markets: Navigate to the Markets section to view available trading pairs, recently listed markets, 24h USDC distribution, biggest movers, current prices and 24h trading volumes. You can also view price trends, helping you make informed decisions.

Order Book: dYdX Chain’s orderbook and matching engine is fully decentralized and purpose built for the optimal trading experience. It shows active buy and sell orders, giving you insights into market trends. This information can guide your trading strategy, especially when placing limit orders.

Step 4: Start Trading

Now that you’re familiar with the interface, you’re ready to place trades:

Select a Market: Choose a trading pair from the Markets section. dYdX Chain offers over 63+ pairs, allowing you to diversify your portfolio or focus on specific assets. You can switch between the selected market and all available pairs using the All Markets button in the top left menu.
Order Type: Decide on an order type, such as a market order (instant execution at current prices) or limit order (executed at a specified price). Limit orders are useful for specifying exact entry or exit points for your trades. For a detailed overview you can view this comparison table.
Enter Trade Details: Specify the amount and price for your trade. Double-check these details before finalizing to avoid mistakes.
Set The Leverage: Deciding what leverage to use is a crucial aspect of perpetual trading. Leverage refers to the funds borrowed from the platform to amplify a trade, acting as a multiplier on gains or losses. dYdX Chain offers up to 20x leverage trading. The liquidation price is calculated automatically before you enter the trade, helping effectively manage the risk.
Understand dYdX Trading Fees: Fees vary based on the type of trade and your trading volume in the last 30 days. Fee is between 0,025% and 0,05% for taker orders. Generally, the fees are lower than that on centralized exchanges. Up to 90% of your trading fees are distributed instantly back into your dYdX Chain address. Additionally there is an incentive program currently live that subject to governance will distributed 5M USD in DYDX to eligible traders.
Review and Confirm: Double-check all details before executing your trade.
Manage Your Positions: Monitor open positions from the dashboard and manage them by closing or modifying as needed. Keeping track of your positions helps you adapt to market changes and protect your investments.

Step 5: Get The Most Of dYdX Trading Rewards and Launch Incentives

Trading rewards incentivize users to trade on the protocol. dYdX rewards users for every successful trade based on the amount of fees paid. The system automatically distributes trading rewards directly to the trader’s account per block. Prior to each trade, the UI will also show the expected amount of rewards a trade of that size will receive.

The dYdX Chain also runs a Launch Incentives Program, tailored to expand and transition the current dYdX user base to the new protocol. The governance proposal set aside $20M of DYDX from dYdX Chain Community Treasury to be distributed as rewards for trading and market making activity. You can find an extensive blog post describing the program details here.

Step 6: Stay Informed

Trading on dYdX Chain requires staying updated:

Community: Join the dYdX community on social media or participate in forums to stay informed about updates and opportunities. Engaging with the community can also provide valuable insights and support.
Learning Resources: Explore educational materials provided by dYdX Academy and other DeFi resources to enhance your trading skills. Continuous learning can help you refine your strategies and navigate the platform more effectively.
Security: Always keep security in mind, enabling two-factor authentication (2FA) and avoiding sharing sensitive information. Regularly review your security settings to protect your assets.

Although perpetual trading is inherently risky and not recommended for beginners, dYdX Chain offers an excellent starting point for those interested in trading perpetual futures. The platform boasts high liquidity, support for a wide range of assets, and low fees due to its advanced technology. These features make dYdX Chain a serious competitor to prominent centralized exchanges.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Dogecoin Holding Time and Whale Activity Spikes

Published

8 minutes ago

January 22, 2025

Coin2049 Newsletter

Dogecoin (DOGE), a leading meme coin, is signaling a potential breakout from its narrow trading range.

If this momentum continues, it could reclaim its multi-year high of $0.48, fueled by extended holding periods and increased accumulation by large holders.

Dogecoin Investors Reduce Distribution

The on-chain assessment of DOGE’s performance has revealed a significant spike in the holding time of all its coins transacted in the past seven days. According to IntoTheBlock, this has climbed by 302% during the review period.

The holding time of an asset’s transacted coins represents the average duration tokens are kept in wallets before being sold or transferred.

Longer holding periods like this reduce selling pressure in the DOGE market. This reflects stronger investor conviction, as investors choose to keep their coins rather than sell them.

Dogecoin Holding Time. Source: IntoTheBlock

In addition to reducing selling activity, DOGE whales have increased their holdings over the past week. This is reflected by the 112% uptick in its large holders’ netflow during that period.

An asset’s large holders’ netflow metric tracks the movement of coins into and out of wallets controlled by whales or institutional investors. When this metric spikes, it suggests that these large holders are accumulating more of the asset, signaling increased confidence in its future price movement.

Dogecoin Large Holders Netflow. Source: IntoTheBlock

DOGE Price Prediction: Bullish Run Could Continue

If this bullish momentum is maintained, DOGE will extend its weekly 3% spike. As buying pressure strengthens, the meme coin could revisit its four-year high of $0.48.

Dogecoin Price Analysis. Source: TradingView

However, this bullish outlook will be invalidated if accumulation stalls and selling activity recommences. In that scenario, DOGE’s price could slip to $0.29.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Market

Base DEX Volume Approaches $3 Billion Amid Growing Adoption

Published

1 hour ago

January 22, 2025

Coin2049 Newsletter

Base, Coinbase’s Layer-2 (L2) blockchain solution, has reached new heights, setting an all-time high daily decentralized exchange (DEX) trading volume near $3 billion.

This milestone reflects Base’s growing prominence in the L2 space and its role in scaling on-chain transactions for Coinbase users.

Base Hits New Milestone in DEX Volume

Blockchain analyst Dan Smith highlighted Base L2’s record-breaking volume of $2.9 billion, including $1.3 billion in ETH-USD trading, which also hit an all-time high. Other trading pairs, such as ETH-cbBTC and BTC-USD, were close to breaking their own records.

Base DEX Volume By Pair Type. Source: Blockworks Research

The $2.9 billion DEX volume reflects Base’s growing appeal among traders, particularly in ETH-USD pairs, which benefited from recent price volatility. Alexander, another blockchain enthusiast, noted that this milestone marked the first time Base nearly tagged $3 billion in daily volume, alluding to the development as evidence of L2’s growing adoption.

AerodromeFi, a liquidity-focused decentralized protocol on Base, also recorded an all-time high of $1.68 billion in volume, further emphasizing the ecosystem’s momentum.

“This is the first time Base nearly passed $3 billion and AerodromeFi set a new ATH of $1.68 billion in volume,” Alexander commented.

Base’s success is particularly notable because it operates without a native token. Coinbase explicitly ruled out launching a token for Base, prioritizing ecosystem growth and user adoption instead. This approach has likely contributed to its traction by focusing on utility and reducing speculative risks that could deter long-term users.

“There are no plans for a Base network token. We are focused on building, and we want to solve real problems that let you build better,” Base lead developer Jesse Pollak stated recently.

Consistent Growth in Transactions and TVL

The recent achievement follows Base’s earlier milestones, including reaching one billion transactions two months ago and surpassing six million daily transactions in October. More closely, the network recently outpaced Ethereum in user growth amid growing crypto markets.

Additionally, Base’s Total Value Locked (TVL) has seen consistent growth, indicating increased user participation, asset inflows, and liquidity within its ecosystem. A rising TVL signals greater confidence in the platform, fostering a stronger and more sustainable DeFi environment.

Base TVL and DEX Volume. Source: DefiLlama

Despite its impressive growth, Base has faced some criticism. The network was accused of copying aspects of an NFT project, sparking concerns over originality and intellectual property. While this controversy did not deter adoption, it highlights the challenges of rapid innovation in the competitive blockchain space.

Base’s trajectory positions it as a serious contender in the L2 space, competing with established players like Arbitrum (ARB) and Optimism (OP). Its emphasis on utility, combined with rising user participation and liquidity, paints a promising picture for its future.

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Is a Drop Below $0.92 Inevitable?

Published

2 hours ago

January 22, 2025

Coin2049 Newsletter

Cardano’s recent sideways price action has led to a surge in demand for short positions among futures traders.

As the coin’s momentum slows, traders are increasingly betting on a price decline, signaling a bearish sentiment toward ADA.

Cardano Traders Bet on a Price Decline

According to Coinglass, ADA’s Long/Short Ratio is at a monthly low of 0.82, indicating a high demand for short positions.

An asset’s Long/Short Ratio compares the number of its long (buy) positions to short (sell) positions in a market. As with ADA, when the ratio is below one, more traders are betting on the price falling (shorting) rather than rising. If short sellers continue to dominate, this can increase the downward pressure on the asset’s price.

Additionally, ADA’s Weighted Sentiment remains negative, currently standing at -0.074, reinforcing the bearish outlook for the altcoin.

Weighted Sentiment gauges the overall market bias by analyzing the volume and tone of social media mentions. A negative value signals growing skepticism among investors, often leading to reduced trading activity and downward pressure on the asset’s price.

ADA Weighted Sentiment. Source: Santiment

Notably, ADA whales have reduced their trading activity over the past week, with the coin’s large holders’ netflow dropping by 90.29%, according to IntoTheBlock.

Large holders, defined as addresses holding more than 0.1% of an asset’s circulating supply, play a significant role in market movements. A decline in their netflow indicates reduced buying activity, adding to the downward pressure on ADA’s price.

ADA Large Holders Netflow. Source: IntoTheBlock

ADA Price Prediction: Recovery to $1 or Decline to $0.80?

ADA is currently trading at $0.98, hovering just above its support level of $0.90. If bearish pressure intensifies, the price may test this support. A failure to hold at $0.90 could see ADA’s decline extend further, potentially dropping to $0.80.