It is currently among the top 10 DeFi protocols in terms of locked assets, ahead of well-known DeFi protocols such as Uniswap and Bancor.
It consists of a non-custodial trading platform based on Ethereum, targeting experienced traders.
It allows users to take out loans as well as margin trading on supported assets, i.e. ETH, DAI and USDC.
Margin trading is the main difference with Compound and allows experienced traders to open short or long positions with leverage up to 4x.
The process of opening leveraged positions is not particularly easy, so this platform is a bit complex for non-experts, however, given the growth of locked funds, it looks like it isn’t such a challenge.
In reality, following an initial peak of over $31 million in locked assets in November 2019, dYdX fell sharply to around $13 million in January 2020. Since then, however, it has recovered, first returning to 28 million in February, then falling below 19 million during the collapse of the financial markets in March, to then rise again and reach a new all-time high in mid-June, exceeding 36 million.
dYdX does not have a native token, so it is not possible to compare its success on the market with, for example, COMP or MKR, the Compound and MakerDAO tokens respectively.
dYdX does not charge transaction fees, although the fees for recording transactions on the Ethereum blockchain are still present.
A special characteristic of this margin trading platform is that leveraged positions must be closed within 28 days, otherwise, they are automatically closed and the collateral is liquidated.
Recently, perpetual contracts with leverage up to 10x have also been launched, although for now only on the BTC/USDC pair.
Moreover, dYdX allows those who deposit cryptocurrencies to make them available to traders, as a way to earn interest for every second that the cryptocurrencies are kept locked.
This way the protocol creates a unique liquidity pool in which it brings all the locked assets together and allows anyone to borrow as much as they want. All of this in a decentralized, non-custodial manner.
Finally, it is worth remembering that on help.dydx.exchange it is possible to find a lot more technical information for those who want to operate on the platform in an advanced way, considering that it is in all respects a not at all trivial platform.