dYdX continues to dominate the decentralized perpetual futures market, consistently leading in trading volume despite growing competition. Recent data confirms its strong position as the sector’s top platform.
Token Terminal reports that, as of early 2024, dYdX’s trading volume significantly outpaced rival decentralized derivatives platforms—even when only accounting for its StarkWare-based Layer 2 version (v3). The newer dYdX Chain (v4) now matches v3 in volume and shows even greater potential with its incentive mechanisms.
Launched on October 26, 2023, dYdX Chain marks a major evolution: it fully decentralizes the order book and matching engine, and distributes trading fees to those who stake the platform’s native DYDX token.
The Path to Full Decentralization with dYdX Chain
dYdX was founded in 2017 by Antonio Juliano, a former Coinbase engineer. The project quickly garnered support from top investment firms, including Andreessen Horowitz and Polychain Capital.
The platform initially offered decentralized margin trading (v1 and v2), but high gas fees and scalability limitations on Ethereum hindered user experience. This led to the development of v3, which introduced an order book model built on StarkWare’s Layer-2 technology. Coupled with the launch of the DYDX token, this upgrade drove exponential growth in trading activity.
With dYdX Chain (v4), the platform transitioned to a standalone blockchain built with Cosmos SDK and Tendermint Proof-of-Stake consensus. This architecture supports up to 2,000 transactions per second and represents a full shift to decentralization.
Unlike v3—where order book management and fee collection were handled centrally by dYdX Trading Inc.—v4 is community-governed. Validators around the world operate the matching engine, and listing decisions are made through on-chain governance.
Revenue Sharing: Rewards for Stakers and Validators
A major appeal of dYdX Chain is its transparent and decentralized fee structure. All network fees—including trading fees paid in USDC and gas fees paid in DYDX or USDC—are distributed to stakers and validators.
Rewards accumulate per block (approximately every 1.08 seconds) and can be claimed manually. Since most rewards are in USDC, their value remains stable until claimed.
Over the past 30 days, the network distributed more than 2.5 million USDC and 126 DYDX in staking rewards. Validators may charge between 5% to 100% commission on rewards. Users can stake through wallets like Keplr and choose among 60 active validators.
The annualized staking yield has ranged from 6.2% to 29% recently, averaging around 15%. Currently, over $212 million worth of DYDX is staked—a figure that has remained steady over the past month.
Hardware wallet users are also supported: Ledger devices can integrate with Keplr to enable secure staking directly from cold storage.
Additionally, Stride, a leading liquid staking provider in the Cosmos ecosystem, now supports DYDX. Users who stake via Stride receive stDYDX tokens, which auto-compound rewards. Early stakers also became eligible for STRD token airdrops.
Incentive Programs Driving Volume Growth
Data from dYdX’s official site shows that v4 has surpassed v3 in several metrics. Recent 24-hour volume reached $688 million on v4 compared to $546 million on v3. Order count was also higher on v4. Open interest, however, remains larger on v3—indicating room for growth on the new chain.
This growth is fueled by strategic incentives. dYdX DAO authorized Chaos Labs to run a six-month program distributing $20 million in DYDX to encourage migration to v4.
The initiative is divided into four “Trading Seasons.” Season 2 is currently underway. Users earn points based on trading activity, and rewards are distributed at the end of each season based on point accumulation. Chaos Labs provides a public dashboard where users can track their rank and earnings.
Season 2 introduced performance-based rewards, allocating 20% of trading rewards to the most profitable traders—a move aimed at attracting skilled participants.
Trading fees on dYdX Chain are also highly competitive. Makers pay as low as 0.01%, and takers are charged a maximum of 0.05%. These rates are lower than many centralized exchanges.
Users can connect via MetaMask and other popular wallets and deposit funds from networks including Arbitrum, Optimism, and Avalanche. The recent introduction of native USDC via Noble enhances deposit efficiency. Market orders are also noticeably faster on the new chain.
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Frequently Asked Questions
What is dYdX Chain?
dYdX Chain is a decentralized blockchain built specifically for perpetual futures trading. It uses a Cosmos-based proof-of-stake model to offer full decentralization, low fees, and high throughput.
How do I earn rewards on dYdX?
You can earn rewards by staking DYDX tokens with a validator. Rewards come from trading fees and network gas fees, distributed in USDC and DYDX.
Can I use a hardware wallet with dYdX Chain?
Yes. Ledger hardware wallets are supported through integration with Keplr, allowing secure staking and transaction signing directly from your device.
What are Trading Seasons?
Trading Seasons are incentive programs that reward users with DYDX tokens for trading on dYdX Chain. Each season lasts several weeks and distributes tokens based on user activity and performance.
How does dYdX compare to centralized exchanges?
dYdX offers similar trading features with fully on-chain execution, self-custody of funds, and community governance. Fees are competitive, and users retain control of their assets.
Is dYdX Chain secure?
The network is secured by a decentralized set of validators using Tendermint consensus. All operations—including order matching and transaction settlement—are run on-chain.
Conclusion
dYdX remains the dominant platform in decentralized perpetual trading. The launch of dYdX Chain has further strengthened its position by improving decentralization, scalability, and reward mechanisms.
All trading fees are now distributed to stakers and validators, aligning incentives across the ecosystem. Ongoing programs—including maker rebates, trading incentives, and performance rewards—are likely to continue driving growth in both volume and open interest.