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DYDX Exchange Guide: How to trade on DYDX?
With the fall of FTX as an exchange platform, a lot of panics has been stirred up in the crypto space. A lot of people have lost their funds and are now looking for DeFi (decentralised finance) alternative that they can use to trade. One of the best options as an alternative to FTX is dYdX. In this guide, we briefly cover what dYdX is, why should you opt for this platform and how can you trade on the platform.
What is dYdX?
dYdX is a decentralised exchange built on a layer 2 protocol. The platform is powered by Starkware and claims to provide deep liquidity and 20x more Buying Power to its users. They allow you to trade perpetual contracts at low fees and lightning-fast speed. The trading volume of dYdX in the last twenty-four hours is over 2 billion dollars. The StarkEx blockchain used by dYdX has a zero-knowledge proofs system in place to guarantee secure and smooth transactions.
What are the order types on dYdX?
dYdX currently supports 5 kinds of orders namely Market, Limit, Stop Limit, Trailing Stop, and Take Profit Limit.
How to connect your wallet to dYdX
Step 1– Go on DYDX Exchange
Step 2- Click on the Trade option in the upper right corner.
Step 3– Click on connect the wallet to link your wallet with dYdX.
Step 4 – Choose your preferred wallet, in this case, MetaMask
Step 5– It prompts you on MetaMask to add your wallet.
Step 6– Once your wallet is connected you can find the option to deposit or withdraw funds.
How to trade cryptocurrencies on dYdX?
dYdX can be used for as SPOT and derviate crypto exchange to buy and sell your favorite tokens. The UI is simple and is very much like trading on Binance, FTX or any other popular crypto exchange.
Step 1– To trade in the platform click on the trade option next to the portfolio.
Step 2– By clicking on ETH-USD, you will find a drop-down box of all available trading pairs from which you can choose your desired pair.
For Example, you need to place a buying order for ETH-USD.
Step 3– Click on the Sell option on the left-hand side
Step 4– Select the Limit price and then enter the required amount in USD.
Step 5– Finally Click on Place Limit Order to complete the transaction
On the screen, you can also find various tabs that give you details of your trades, orders, liquidation prices, leverage etc.
On the dYdX platform, you can both buy and sell and can also find other order options by clicking on “Stop”
Read more about Best Crypto Wallets in India: Top 7 Bitcoin Wallets
Why should you use dYdX?
The dYdX platform comes with a wide array of benefits. Some of these are
- You hold your own coins, and anything like FTX is not possible.
- It brings with it all the associated perks of a decentralized exchange. So you need not KYC.
- There are zero trading fees for up to a hundred thousand dollars a month. Charges are applied with the Maker fee of 0.02% and the Taker fee of 0.05%
- They offer leverage of up to 20x
- Traders involved with the dYdX token also get additional rewards, in form of DYDX tokens.
- The user interface is very easy to use.
Backers involved in dYdX
The dYdX platform is backed by well-known crypto investors like a16zcrypto, Dragonfly Capital, Andreessen Horowitz, Polychain Capital, Wintermute, Paradigm and more.
Stop Limit Order
A Stop Limit Order is a kind of trade order that combines features of both stop loss and limit order and can be used to limit your losses by automatically closing the positions when their prices fall.
Stop Market Order
A Stop Market Order executes only when the index price crosses a specified Stop Price.
Trailing Stop Order
A Trailing Stop Order lets users protect their gains by letting a position remain open and make a profit as long as the price is moving in their favour.
Take Profit Limit Order
Take Profit Limit Orders enable traders to set targets which protects profits on positions by specifying a price at which to close an open. The profit price is triggered by a limit order
Take Profit Market Order
Take Profit Limit Orders enable traders to set targets which protects profits on positions by specifying a price at which to close an open. The profit price is triggered by a market order
In the current atmosphere, with people having lost trust as well as significant amounts of money in certain exchanges, dYdX serves as a good platform to serve your trading needs. However, trading in crypto is a volatile endeavour and comes with certain risks attached. So you must always do your research and take all necessary steps to protect yourself from risks.
Learn more: 5 Ways to Trade Crypto: Know the trading strategies
How much leverage can you use on dYdX?
dYdX offers up to 20x leverage.
What wallets does dYdX support?
dYdx supports MetaMask, Coinbase Wallet, Ledger, Trezor, Wallet Connect, imToken
What is Starkware?
Starkware is a software development platform that aims at improving scalability by moving computation off-chain.
Will there be more trading pairs?
dYdX says that through their scalability options they are bringing more and more trading pairs in the future
What collaterals are accepted on dYdX?
dYdX settles all Perpetual Contracts in USDC