At 7am on September 8th(UTC), dYdX, the much-admired decentralized derivatives protocol will release early-stage airdrop rewards and first-stage mining incentives (about 80m dYdX, 8 percent of the total), which will undoubtedly be an airdrop feast for participants.
No wonder someone joked : “Weather forecast: there will be a tornado at 11 o’clock tomorrow night, a lot of money will be blowing toward, please be alert to dYdX airdrop owner, you could block their wechat moment, weibo and other social software in case of FOMO(Fear of missing out).
Readers who interested in dYdX may want to know some important information about it, such as platform data, financing, experience, initial circulation, use, valuation, future prospects, and risks, and so on.
Financing and investment agency
From December 2017 to date, dYdX has received a total of $87 million in four rounds of financing, including from industry-leading institutions such as A16z, Polychain, Three Arrows Capital (3AC), Paradigm, delphi Digital, etc.
These investors will receive about 277 million dYdX tokens in five years ( the average cost is about $0.314 per piece), according to the unlock rules issued by the project side, including investment institutions, the dYdX team and their consultants, these interest groups will centrally unlock the first round tokens (30%) after 18 months, the second round of tokens linearly unlocked in the 19th-24th month (40%), the third round of tokens (20%) linearly unlocked in the 25th-36th month, and the last round of tokens (10%) linearly unlocked in the 37th and 48th months.
In other words, the circulation of $dYdX will come entirely from the community over the next 18 months (including retroactive airdrops, trading mining, liquidity incentives, and Staking rewards).
Three Main Function of $DYDX
What’s the use of these $dYdX ? According to official instructions, users can use $dYdX in three ways:
1, Governance, to make recommendations or vote on changes to the agreement;
2, Enjoy a discount on transaction fees;
3, Staking to get pledge bonus: https://dydx.foundation/blog/en/safety-staking
(Note: A total of 25 million tokens will be used for the staking incentive which will take 14 days to withdraw)
Whether the trading fees will be included in the pledge award depends on the later situation of community governance of dYdX.
Platform data of dYdX: incentive program of Mining stimulates trading volume, with a maximum daily trading volume of over $2.5 billion
Let’s take a look at the data of the dYdX platform, according to the DeFi user data of the rhen8 statistics, the number of independent addresses in dYdX is now 60,859, an increase of 162 addresses over a month ago, while the number of independent addresses of dydx increased by about 43,000 in the five months from October last year to March this year (an average monthly increase of 8,600 addresses), showing that the recent growth of users of the dYdX platform is slowing.
In addition to the overall downturn in the DeFi environment, this time actually related to the release of DYDX tokens airdrop scheme, explaining that many users have previously used a large number of addresses to interact with the dYdX protocol in order to obtain potential airdrops. As the airdrop scheme announced, these users lost the power to brush the address.
However, we expect that dYdX will usher in a new period of growth in user data after the official release of Compound tokens based on the growth of user data.
Another interesting thing is the trading data of the dYdX platform.
According to Coingecko statistics, the dydx platform has traded about $46.6m in spot trading in the past 24 hours, its derivatives been traded about $813m , while compared with about $2.75bn for Uniswap V3, DEX’s leading project, over the same period.
On 30 August , the trading volume of derivatives on the dydx also exceeded US$2.5 billion.
As shown in the figure above, the soaring transaction volume of the dydx platform is actually related to the announced transaction mining rules. Before the announcement of the plan, the daily trading volume of the dydx platform was about 32 million US dollars. After the announcement of the incentive plan, the daily trading volume of its platform increased by 1–2 orders of magnitude, and the closer it was to the end of each Epoch cycle.
The more crazy the transaction data growth of the platform, this obvious amount of scalping has also attracted the attention of the project side.
On 31 August , dYdXFoundation tweeted that any account marked as “Clear Wash Trading” by dYdX will be excluded from trading rewards, and after the implementation of this measure, many adopt “hedging methods”.
The trading rewards for the large accounts who used the trading volume were cancelled, which eventually led to an increase in the number of rewards per capita for the remaining traders by about 30% (Note: In the end, the cost of obtaining coins for the first phase of DYDX transaction mining is about 2.5–3 U).
Can the circulation of dYdX tokens drive the entire DeFi derivatives track?
To answer this question, we need to solve three questions
1, What are the recent data changes in the DeFi derivatives track?
2, How is the user experience of dYdX?
3, What will be the data changes of dYdX and the entire derivatives track in the future?
For the first question, we have already mentioned part of it above. From the perspective of transaction volume, whether it is dYdX or perp, their platform transaction volume has shown an explosive growth trend in the future (Note: dydx increased by 441% from the previous month, and perp increased by approximately 31.88% from the previous month)
In terms of project valuation, tokens of some derivatives protocol have also experienced a wave of hype in advance (Note: DDX’s market value has increased by 168% in the past month, and its DerivaDEX trading products are not yet online).
It can be seen that these DeFi derivative protocol are more or less affected by the “Big brother” dydx.
The second question, How is the user experience of dYdX?
In the early stage, dydx deployed on the Ethereum mainnet, its experience is very bad (especially the problem of expensive transaction fees and slow transactions), but these problems that plagued users have been effectively improved with the migration of dydx to StarkWare’s second-tier network StarkEx.
In the extreme market last night, the dydx platform did not have any downtime, which is indeed commendable, but according to individual users’ reactions, dydx still has a lagging situation.
The third question, What will be the data changes of dYdX and the entire derivatives track in the future?
Assuming that the performance of dYdX tokens after circulation meets (or even exceeds) our expectations above, then the incentives for transaction mining (the number of tokens per month remains unchanged) will attract more traders to participate in dydx transactions, and finally this month
The overall data may increase more than 2 times compared with last month.
In the end, the entire defi derivatives track is expected to usher in a wave of growth driven by dYdX in the short term.
The concerns of Regulatory
It should be noted that the market recently reported that the US SEC is investigating Uniswap Labs, the development team behind Uniswap. Obviously, the US regulators have noticed the DeFi protocol, and dydx, the seed project of the derivatives track, dydx will naturally receive special attention from regulators.
In order to respond to related regulatory risks, dYdX first stripped off the role of token reward distribution to the foundation;
The second tool is to cancel the user rewards of the US IP (it has been criticized by users), and the third is to not promise financial returns, CEX and DEX listing and trading, and whether these measures can prevent them from being subject to the hammer of supervision remains to be seen.