Decentralized Leverage Trading Exchange dYdX Raises $65 Million

| Peter Wind

Key highlights:

  • Decentralized leverage trading exchange dYdX has raised $65 million in a Series C led by Paradigm 
  • In February, dYdX teamed up with StarkWare to deploy a layer 2 decentralized trading platform
  • dYdX is one of the biggest DeFi projects that hasn’t launched its own token 

dYdX raises $65 million as it prepares to decentralize its protocol and expand its features

The developers behind decentralized leverage trading platform dYdX have raised $65 million in a Series C investment round led by Paradigm. The round also included new strategic investors like CMS Holdings, Electric Capital, StarkWare and HashKey, as well as existing dYdX investors like a16z and Polychain Capital.

DydX first went live in May of 2019 as one of the first DeFi protocols that supported decentralized margin trading. Later on, the platform also introduced perpetual contracts, a type of derivative that’s very popular on centralized cryptocurrency exchanges. Currently, dYdX lists perpetual contracts for trading BTC, ETH and LINK against the USD, with a maximum leverage of 25x. The exchange currently lists 16 different crypto assets on its margin trading markets.

Since February this year, dYdX has been using StarkWare’s StarkEx layer 2 solution to give users the ability to trade without having to incur gas costs, making trading cheaper and faster. According to a post shared by the dYdX team, their layer 2 protocol has facilitated more than $2.2 billion in volume from over 11,000 traders in the last 5 months.

Interestingly enough, dYdX is one of the biggest DeFi projects that hasn’t launched its own token. The team says that one of the ways in which it plans to use the capital from the Series C round is to “decentralize the protocol”. Other projects like Compound have gone about this by launching governance tokens, although it’s unclear at this time whether the dYdX project has similar plans or not. 

The dYdX team says it also plans to leverage the fresh capital to list perpetual contracts tied to more crypto assets, launch a mobile app, and expand their team. 

Evgeny Gaevoy, the CEO of market maker Wintermute, commented on dYdX’s $65 million Series C: 

“dYdX is pioneering layer-2 DEX trading with their new platform based on StarkWare’s StarkEx scalability engine. It offers decentralization and non-custodial trading of perpetual futures without any of the drawbacks that similar solutions built on layer-1 Ethereum face.”

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