In a shift of power in the Decentralized Exchange (DEX) landscape, dYdX has emerged as the largest DEX by daily trading volume, surpassing competitor Uniswap. This follows the platform’s recent migration from the Ethereum blockchain to Cosmos. Recent data from CoinMarketCap demonstrated dYdX’s Cosmos-based offering, v4, registered a whopping $757 million within 24 hours, comfortably surpassing Uniswap v3’s recorded $608 million. dYdX’s prior market, v3, also racked up an impressive $567 million in the same period.
Since its launch, dYdX’s v4 market has accumulated a staggering total trade volume of $17.8 billion. Its predecessor, v3, in 2023, achieved an excess trading volume of $1 trillion, underscoring the platform’s dominance. Notably, several days saw the exchange exceeding $2 billion in trading volume.
The move to Cosmos, a blockchain with significantly lower usage but cheaper transaction costs than Ethereum, had initially sparked worries that dYdX might lose out in volume trading. However, the high volumes of trade recorded have seemingly validated the shift to the Cosmos ecosystem.
dYdX specializes in perpetual futures trading, which involves contracts with no set expiry date. This approach allows investors to speculate on asset prices without the need for physical settlement of items involved in traditional futures trading.
In its most recent upgrade to v4, the platform has evolved into what it terms as a “fully decentralized” chain, a departure from its v3 version. While no closing date has been set, it is understood that the v3 version on Ethereum will eventually be phased out.
Analysts, like Paul Veradittakit of Pantera Capital, believe users of Decentralized Finance (DeFi) are drawn to platforms like dYdX that promise high throughput for continuous and rapid trading. With dYdX v4’s move to a stand-alone blockchain using the Cosmos SDK, the platform’s high trading throughput, cut-rate transaction costs, and tailor-made on-chain logic appeal to sophisticated and frequent traders’ needs. The platform’s reputable backing from Pantera, Paradigm, and Delphi Digital further reinforces dYdX’s prominence in the DEX landscape.