dYdX, a key player in the decentralized exchange (DEX) arena, has recently outpaced Uniswap in terms of daily trading volumes, marking a significant achievement. This milestone follows the exchange’s strategic decision to migrate from the Ethereum blockchain to the Cosmos network.
According to the latest data from CoinMarketCap, dYdX’s Cosmos-based version 4 (v4) experienced a remarkable trading volume of $757 million within a 24-hour period. The data indicated that dYdX has exceeded Uniswap v3 and its own Ethereum-based version 3 (v3) which acquired $608 million and $567 million in trades respectively. Since the launch of dYdX v4, the platform has amassed an impressive total trade volume of $17.8 billion, underscoring its strong performance. The year 2023 was particularly notable for dYdX v3, which recorded over $1 trillion in trading volume.
dYdX has been at the forefront of offering perpetual futures trading, a type of contract without an expiry date. This strategy allows traders to speculate on the price fluctuations of underlying assets without the need for actual physical delivery, a characteristic of traditional futures trading.
Paul Veradittakit from Pantera Capital commented on the growing popularity of platforms like dYdX. He emphasized the DeFi sector’s demand for high throughput and continuous trading capabilities. Veradittakit pointed out that high transaction fees, commonly known as ‘gas fees’ on networks like Ethereum, can significantly reduce user profits and the appeal of such platforms.
The recent surge in dYdX v4’s trading volume can be attributed to its enhanced trading throughput, lower transaction costs, and tailored on-chain logic designed for sophisticated and high-frequency trading. The platform’s use of the Cosmos SDK has been instrumental in achieving these improvements.
dYdX’s success in its new format not only highlights the platform’s adaptability but also signals a potential shift in the DeFi landscape. The transition to a “fully decentralized” chain with v4, in contrast to its earlier Ethereum-based versions, resonates with the current demands of DeFi users. While plans to eventually close dYdX v3 on Ethereum have been announced, a specific date for this closure has not been set.