dYdX: Decentralized Derivatives and Margin Trading

Episode 13
  • Host

    Zach DeWitt

  • Guests

    Antonio Juliano


  • Date

    October 9, 2018

  • Duration

    35 minutes

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Antonio Juliano, founder and CEO of dYdX, wants to add another layer to the decentralized financial stack, and dYdX is doing this by building a protocol that lets you go short or get leverage on any cryptocurrency.

Listen to learn how dYdX makes decentralized financial derivatives and margin trading possible, and what the future may hold for the crypto counterpart of the most massive market in the world.

The Decentralized Financial Stack

Derivatives are far and away the largest market in the world, usually at about 10x the spot market. With cryptocurrency, the spot market is somewhere in the billions.

You would expect the derivatives market to be somewhere in the tens of billions, but it’s not, which makes it a potentially massive and unrealized market. And that’s something Antonio and the dYdX team are really excited to tackle.

A Margin Trading Protocol

dYdX is a protocol for decentralized financial derivatives and margin trading. The first thing they’re building is a margin trading protocol that lets you go short or get leverage on any cryptocurrency--for now, Ethereum-based cryptocurrency--without trusting anybody that you’re trading with

Interacting with dYdX can be as simple as investing in one of the margin tokens--for example, a short ETH token--or as sophisticated as creating smart contracts and becoming a lender to the dYdX platform.

The Future of dYdX

dYdX is not just a margin trading protocol.They think of themselves as a protocol for all types of financial derivatives, and they are working on multiple future protocols.

An options protocol or other protocols that sit on top of the options or margin trading protocol are some things we might expect to see from them in the future, and the ultimate goal to take over most of the derivative and margin trading volume for cryptocurrency in the next 5 to 10 years.

Key takeaways:

  • Antonio believes the most interesting area in crypto is the financial stack that is currently being built out
  • dYdX has recently launched a margin trading protocol with the ability to short assets and go leveraged long
  • dYdX has future plans to launch an options protocol to write, buy, or trade options on any token

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