dYdX Review

What is dYdX?

dYdX is a decentralized exchange that offers advanced trading options to traders around the world. It combines the security and transparency of decentralized platforms with the speed and efficiency of centralized exchanges. Throughout this dYdX review, I’ll explore how such features set dYdX apart from other exchanges.

The dYdX DEX was founded in 2017 by Antonio Juliano, a former software developer at Coinbase and Uber. Antonio brought his knack for developing Web3 tech into his own venture, determined to democratize global access to financial opportunities.

So far in its development, the dYdX DEX has received capital injections from a range of top-tier investors and market makers, including Anderson Horrowitz, a16zcrypto, Polychain, and Cronos, making $45M in revenue in 2024.

dYdX's team, which consists of 50+ members and is located around the world, continues to make breakthroughs with its thread of innovations. One of its biggest waves was when dYdX's exchange volume tipped over $1.5 trillion just a year after the release of V4.

Following V3's success, the DEX launched dYdX V4 Chain, achieving what its previous system could not: faster transaction times, a fully open-source ecosystem, and unlimited market listing, to name a few.

dYdX Unlimited brought a host of new features, such as Instant Market Listing (the ability for any trader to list and trade a new market), MegaVault (a yield generation tool), Trading Rewards ($1.5 million distributed to traders every month) and the new Affiliate Program (with lifetime commissions paid out in USDC).

dYdX Review: PROS

dYdX exchange volume's trailblazing progress over the years suggests that the platform's next-gen trading features have attracted a strong user base. In this dYdX review, I'll dive into what makes such features so appealing.

Starting from how the dYdX DEX manages to double transaction speed with their own L1 network to the strong community governance backed by the DYDX token. I'll help you decide if the DEX is worthwhile by combining my personal findings with user dYdX exchange reviews.

High Level of Decentralization

The current dYdX version operates entirely on its own dYdX Chain, built on the Cosmos SDK. This means all trading activities (order matching, liquidations, and funding rate calculations) are now executed on-chain, making dYdX one of the most decentralized and transparent perpetual trading platforms available.

These validators secure the network, process transactions, and participate in governance, ensuring that no single entity controls the platform. This is a big shift from centralized exchanges and even other "decentralized" trading platforms that still rely on off-chain infrastructure.

Beyond validators, governance is fully community-driven, meaning token holders decide on protocol upgrades, fee structures, and risk parameters. While the transition to full decentralization is ongoing, the current dYdX version sets a new standard for perpetual DEXs by eliminating centralized control and putting power in the hands of traders and stakeholders.

Full Self-Custody - Control Your Funds at All Times

dYdX's decentralization also shines through with its non-custodial approach to security. Simply put, a non-custodial system allows users to retain full control over their assets at all times.

Instead of depositing funds onto the platform, traders can use cold wallets like Ledger Nano X or Trezor Safe 5 to manage their private keys securely. That way, users can minimize the risks of asset hacks, while dYdX can prevent platform failures that typically affect centralized exchanges.

Moreover, on dYdX, trades are executed on-chain directly from users' wallets, ensuring both security and privacy. The platform combines on-chain settlement with deep liquidity and low slippage with full transparency.

On top of that, dYdX's non-custodial setup also supports isolated and cross-margin trading, which is often praised in user dYdX reviews. Why? Well, dYdX's cross-margin trading, for example, enables users to open and manage several positions simultaneously using the same margin to improve capital efficiency.

Within its custodial system, dYdX also seamlessly integrates zero-knowledge proofs (ZKPs), allowing one party to verify a transaction without revealing the underlying data, adding privacy and protection^[2].

Overall, dYdX's non-custodial model aligns with the core values of DeFi, as users won't have to rely on a specific entity to protect their assets or collect their data. Combined with the seamless integration of high-performing features like ZKP roll-up, dYdX as a custodial decentralized exchange is worth trying out for traders prioritizing both security and flexibility.

Advanced Trading Modes

One of the strongest aspects of dYdX is its range of advanced trading tools, making it a standout in any dYdX review. Traders can access perpetual contracts with no expiration dates and a leverage ratio of up to 50x (selected contracts only), providing options for both high-risk and conservative trading strategists.

Traders on dYdX can open positions across 198+ markets, including cryptocurrencies, real-world assets and forex. Its cryptocurrency selection includes the following examples:

• BTC
• ETH
• BNB
• DOGE
• LTC
• AAVE
• ATOM

What is perpetual crypto trading, though? Simply put, it's like betting on the price of a crypto without ever having to actually own it. It’s called “perpetual” because there’s no expiry date, you can keep your position open as long as you want (or until your balance runs out).

You’re basically making a guess: will the price go up or down? If you're right, you make money; if you're wrong, you lose money. So, perpetual trading gives you more flexibility and a chance to profit in both rising and falling markets.

You can use leverage to amplify your trades, meaning you can control a bigger position with less money. But that also means the risk is higher – you can lose your funds faster if the market moves against you. Nonetheless, if you like the idea of making money from crypto price movements without actually holding the coins, perpetual trading is a tool worth knowing about.

By the way, traders can opt between long or short positions when trading perpetual contracts, whereas typical spot trades only let you go long. This is why you can bet on a market going up or down and potentially profit from it. You also get access to stop loss and take profit orders, which help you manage risk, even while you’re away from your laptop or phone.

Speaking of which, dYdX's new iOS mobile app simplifies perpetual trading, making it more accessible to newcomers. Just like the web version, it supports various order types, including stop loss and take profit, to help traders automate their strategies with controlled risk.

Plus, as I've mentioned before in this dYdX exchange review, isolated and cross-margin trading are also available. For capital efficiency, traders who prefer opening multiple positions under one margin account can go with the cross-margin trading mode. This can help reduce the risk of liquidation and optimize collateral.

FYI, if you're a budget-conscious trader, note that dYdX Chain helps reduce gas fees for your trades, but I'll cover this in the "dYdX Exchange Fees" chapter.

Various Earning Tools

Trading is not the only way you can earn on dYdX. As you already know, the dYdX Unlimited introduced a few other exciting features.

One of which is the MegaVault, which lets users deposit USDC to earn yield while boosting platform liquidity. The yield comes from trading fees, market-making profits, and governance-set incentives. Deposits are flexible, with no lockups, and an elected operator initially manages allocations, aiming for full automation in the future.

Moreover, dYdX distributes $1.5 million worth of DYDX tokens to active traders every month. These rewards are based on trading volume, meaning the more you trade, the bigger your share of the reward pool. Though, even if you've just started, you can get rewarded for any participation in the platform.

On top of that, dYdX now has a unique affiliate program that resembles those usually offered by CEXs. Unlike typical referral programs, dYdX's new affiliate system pays out lifetime commissions in USDC. When someone signs up through your referral link, you earn a percentage of their trading fees forever. Plus, you get your commissions paid out instantly.

Together, these features make dYdX one of the most rewarding decentralized trading platforms, whether you're staking, trading, or referring new users.

Strong Community and Governance

When you're reading user dYdX reviews, you'll probably come across its native token that powers the entire ecosystem. The token shares the same name as the exchange, DYDX. As of writing, there are over 57,000 DYDX token holders.

It's an L1 protocol token on the dYdX Chain, which is a PoS blockchain that leverages the consensus mechanism of CometBFT. Holders of DYDX tokens can obtain special privileges. They can stake their holdings and earn an APY of approximately 5%, paid out in USDC, for securing the network.

DYDX tokens also have governance value. Token holders can vote on protocol updates, trading parameters, and platform improvements, either through Snapshot or on-chain vote. Having this level of transparency empowers token holders to influence the direction of dYdX and its development.

For example, the dYdX Community has voted on launching the first-ever DYDX Buyback Program. Starting on March 24th, 2025, 25% of protocol fees are used to buy DYDX from the open market every month. Based on revenue numbers for 2024, that would be over $11M in DYDX over the next 12 months. The buyback program better aligns the DYDX token with protocol growth.

More than that, dYdX's governance system aligns with the core principles of DeFi, ensuring that no single entity has excessive control and transparency. Instead, power is distributed across the community, promoting fairness and transparency.

Users can have a more meaningful role with this decentralized approach, especially when it comes to shaping the platform's trajectory and reinforcing trustless systems.

By empowering its community and decentralizing decision-making, dYdX has set up a flexible and responsive ecosystem. Not only does the governance structure help increase dYdX's exchange ranking, but it also strengthens the platform's standing in DeFi. As a DEX, dYdX is committed to creating a sustainable, user-driven environment through its native token.

Mobile Trading Experience

While compiling my dYdX review, I found its mobile app worth mentioning, as I often like to trade and check my portfolio on the go.

The dYdX DEX mobile app is available on both iOS and Google Play. Interestingly, though, their new iOS app offers a reimagined trading experience custom-made for new traders. The app uses a slider and a refreshed interface to make perpetual trading more accessible to crypto holders who want to try it for the first time.

Similar to the web version, the mobile functionality allows users to trade, track prices, or manage balances effectively, with the added convenience of doing it anywhere and anytime.

One of the app's key strengths is its intuitive interface and real-time market tracking, allowing users to easily monitor positions, browse assets, and link crypto wallets. The dYdX DEX app integrates effortlessly with the hot and cold wallet of your choice, such as Ledger Flex and Trezor Safe 5, ensuring extra protection while enabling access to trading and staking rewards.

As noted in user dYdX reviews, while some advanced features like in-depth analysis tools are still in development, the app regularly releases product updates based on user's feedback. dYdX seeks to ensure its mobile app remains feature-rich and accessible to a growing user base, enhancing the trading experience on both iOS and Android devices.

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dYdX Review: CONS

While dYdX offers a decent range of advanced trading features and a non-custodial asset management framework, the platform is not without limitations. So, allow me to cover the platform's drawbacks in this dYdX review and how they might affect the user's experience.

US and CA Market Restriction

Due to regulatory barriers, dYdX is currently unavailable to US and CA traders. But isn't the DEX based in New York? Well, I was confused as well when writing this dYdX review, but obtaining operating licenses in jurisdictions as stringent as the US is notably challenging.

Understandably, excluding American users is rather a miss. The US is one of the largest crypto markets, and the geographical lock may impact dYdX exchange volume and overall liquidity. So, for US traders looking for alternatives, I'd suggest sticking to highly reputable CEXs like Kraken or Coinbase.

	KRAKEN	COINBASE
Overall Score	9.8	9.6
Best For	Beginners	Advanced Users & Beginners
Operating Countries	United States, Germany, United Kingdom, France, Canada, + 190 more	United States, United Kingdom, Germany, Canada, France, + 100 more
Latest Coupons	Visit Site All Kraken Coupons	GET $200 REWARD All Coinbase Coupons
Verdict	One of the best crypto exchanges, especially in the US.	A reliable, well-known and respected cryptocurrency exchange platform.
	Visit site Read review	Visit site Read review

Table: Kraken VS Coinbase comparison.

Furthermore, the platform's legal restriction in the US not only affects its user base but also hampers governance participation. Since DYDX tokens allow holders to vote on important protocol decisions, the exclusion of US traders may weaken the decentralized governance system, limiting input from a major segment of the global crypto community.

But then again, navigating the complex US regulatory landscape has been a blocker for many DEXs. Until the platform finds a way to comply with US regulations, it will miss out on the opportunity to tap into this market.

📚 Read More: US Crypto Regulations

No Spot Trading

dYdX is a robust DEX for derivatives trading, but it doesn't offer the most basic trading type anymore – spot trading. It was removed from the platform in 2021. Spot trading is generally regarded as a safer entry point. It lets you buy or sell cryptocurrencies at market prices, and most people comfortably choose to hold their assets for strategic exits. In essence, there is less risk involved.

With derivatives trading, though, you can't exactly do that. For instance, when you trade a perpetual contract on dYdX, you're not actually holding the actual crypto asset but, instead, a contract that speculates its future price.

If you've been in the game for some time, you probably understand that the crypto market is too volatile to predict. This is why perpetual contracts are considered to be more risky, as they require a good grasp of the market.

However, dYdX is trying to make perpetual trading as beginner-friendly as possible, especially with the release of its iOS mobile app.

Besides, you can try out dYdX's derivatives trading via its risk-free test environment – V4 Public Testnet. Here, you can experiment with advanced order types, including limit and market orders, and try out long or short strategies. It functions pretty much like the actual interface you see when you're trading, but you do it with testnet USDC tokens, which you can claim from a faucet operated by dYdX Trading Inc.

User dYdX reviews who are getting started with derivatives trading also note the importance of finding a reliable source to support your learning journey. Both dYdX Academy and BitDegree provide plenty of resources to help you understand the advanced mechanics of the crypto world.

dYdX Exchange Fees

After looking at the pros and cons in this dYdX review, let’s look at the platform's transparent and competitive fee structure, which is based on the maker/taker model. Makers who add liquidity benefit from lower dYdX exchange fees compared to takers. Before we get into those in more detail, here's a TL;DR of the dYdX exchange fees:

Table: dYdX exchange fees

The platform's fee structure is tiered, depending on your trading activity over the past 30 days and the proportion of total trading volume you contribute relative to the entire dYdX exchange. As a Tier 1 maker, you'll have to pay a 0.01% trading fee, which is a competitive fee already, especially compared to the rates CEXs charge.

However, the more your trading volume increases, the lower your fees can go, potentially reaching as low as -0.011%. You reach a 0% maker fee with Tier 4 (which requires at least $25 million in trading volume), while negative fees start at Tier 6 (which requires at least $125 million in trading volume and at least a 0.5% exchange market share).

Likewise, if you're a taker, your trading fees begin at 0.05% and can decrease to 0.025% with the more trading volume and exchange market share you accrue. Uniquely, there are zero gas fees for submitting or canceling orders on the dYdX Chain, you only need to pay maker and taker fees. This minimizes transaction costs users typically face on other platforms.

dYdX exchange fees for deposits, on the other hand, vary based on the source chain and asset, and you will need to cover the associated gas fees. There are several ways you can make those deposits.

You can go with the Instant deposit via your connected wallet, which allows you to deposit crypto in less than 60 seconds. This type of deposit is complete with the help of Fun.xyz, and it will include a minimal transaction fee charged by the platform, as well as gas fees.

For lower fees, though, you can also use the Default deposit, which might take more time, but will cost less and has no limit. On top of that, you can go with a deposit via Coinbase, which, as of writing, is the only CEX that supports onboarding onto the dYdX Chain.

Followingly, when it comes to withdrawal costs, users are subject to standard crypto network fees for withdrawals that depend on the asset and destination chain in question. Just note that there is an 11 USDC minimum withdrawal amount on the dYdX Chain.

By the way, note that if your position is liquidated on dYdX, you could lose everything left in your account. The system tries to leave you with something, but at minimum, you'll be charged a liquidation penalty of 1.5% of your position.

Overall, the tiered maker/taker fees and gasless orders on the dYdX Chain position the platform as a more affordable option, especially for those trading in high volumes (after all, you eventually get paid rebates for trading).

How to Use dYdX

Now that you have insights on dYdX's stronger and weaker points, perhaps you’re curious about how to get started on the platform.

How to Set Up an Account on dYdX

No worries, it's time for the practical part of my dYdX review – here's a step-by-step guide for setting up your account:

That's it! Your account is set, the next step is to start trading!

How to Trade on dYdX

Speaking of trading, here's a quick guide on that:

After selecting a pair, you will see real-time market data, price charts, and other key information. Review the data carefully before placing a trade.

Once your trade is confirmed, the transaction will execute without requiring further deposits onto the platform.

Take note that perpetual contracts on dYdX allow up to 50x leverage, providing more opportunities for experienced traders to increase potential returns. Besides, once the position is opened, you can monitor your equity, margin usage, and liquidation price in real time to ensure that your positions are well-managed and within your risk tolerance.

Legacy Features

dYdX has changed and improved a lot over time. If you're interested, though, here's a glimpse at its past.

Layer 2 Scalability via StarkWare

Trading on DEXs is often met with the hindrance of lower transaction speed, especially when compared to high-performing CEXs.

In its basic concept, Layer 2 is a secondary protocol built on top of an existing blockchain^[1]. StarkWare's L2 is built on top of the powerful Ethereum blockchain. By handling transactions off-chain, dYdX's L2 protocol delivered higher transaction speed by reducing the load on the main blockchain.

Taking advantage of ZK-Rollups, StarkWare's L2 solution also played a central role in dYdX's ability to provide more cost-effective transactions. How so? This approach bundled multiple transactions into a single proof, reducing the strain on the Ethereum network while lowering gas fees, as you'll find highlighted in several user dYdX exchange reviews.

In addition to reducing transaction costs, the Layer 2 solution helped support cross-margin trading. It allowed users to manage multiple positions from a single margin account, potentially improving capital efficiency and reducing the risks associated with holding multiple positions.

dYdX’s choice of utilizing ZK-Rollups over other Layer 2 solutions, such as Optimistic Rollups, helped deliver immediate transaction finality. Consequently, trades were processed securely without delay, streamlining the overall trading experience.

By incorporating StarkWare’s scalability technology, dYdX enhanced transaction speed and efficiency, making the DEX accessible to a broader range of users. However, L2's improvements in speed and scalability come with the cost of security. This is one of the reasons why dYdX eventually moved onto its own dYdX Chain.

Pros

• Secure and reliable
• Accepts fiat currencies
• Lots of trading options

Main Features

• Reputable exchange
• Accepts fiat currencies
• Offers various trading options

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Pros

• Fiat currencies - accepted
• Simple to use
• Accepts only the most trustworthy cryptocurrencies

Main Features

• A leading cryptocurrency exchange platform
• Best for beginner investors
• Accepts fiat currencies

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Pros

• Fully reserved and transparent
• Multiple tradable asset classes
• Over 300 supported cryptos

Main Features

• Over 300 cryptocurrencies
• Secure & transparent
• Fully reserved

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Conclusions

Time to close the curtains on my dYdX review. What I've noticed is that the platform makes perpetual trading simple with its beginner-friendly mobile app and low fees but also spices things up with various order types, up to 50x leverage, and lucrative earning options brought by dYdX Unlimited.

Plus, due to the dYdX Chain it's built on, its transactions are blazing fast. Also, let's not forget that dYdX provides users with full self-custody, which gives them personalized control over how they manage their assets.

That said, if you are looking for spot trading, you won't find it on dYdX. The platform's lack of support for US and CA users is another downside to consider. As an alternative, Binance is an exchange that offers various trading types, including spot trading. And, if you're a US trader, consider trying out Kraken or Coinbase.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. C. Sguanci, R. Spatafora, A. M. Vergani: ‘Layer 2 Blockchain Scaling: A Survey’;

2. C. D. Pop, M. Antal, T. Cioara, et al: ‘Blockchain and Demand Response: Zero-Knowledge Proofs for Energy Transactions Privacy'.