The decentralized derivatives trading protocol dYdX is recording a continuous spike in its trading volume, far exceeding the trading volume of Uniswap as per new data.
According to CoinMarketCap data, as of September 28, dYdX 24H transaction volume reached $9.531 billion, ranking first among all DEXs. Its transaction volume was approximately 6.8 times that of UniswapV2+V3 during the same period.
In the same 24H cycle, the combined transaction volume of centralized exchanges Coinbase, FTX, and Huobi Global was only $9.023 billion.
Analysts have noted the increase in DEXs trading volume was presumably affected by China’s recent ban on cryptocurrencies. Jonas Luethy, a junior sales trader at digital asset manager Global Block, pointed out:
“Decentralized exchanges Uniswap and Sushiswap have seen a surge in usage, which is likely a result of China’s ban on centralised exchanges. Since DEX’s only require a crypto wallet and no KYC [know your customer], it is much easier to use and can be set up in a matter of minutes.”
This newfound boost in dYdX transaction volume was also likely due to its transaction mining reward mechanism. According to its reward mechanism, dYdX will distribute 3.835 million platform tokens DYDX every 28 days within 5 years to incentivize users to trade on its platform.
Recently, DYDX token price rose from $12.8 to a maximum of $23, greatly increasing the arbitrage space for transaction mining as well as attracting a large number of users to mine.
However, several analysts have pointed out that once the price of DYDX falls, its arbitrage effect will disappear, and its transaction volume is likely to decline rapidly, possibly triggering DYDX to expand and fall into a “death spiral”.
According to the real-time data on the dYdX governance page, DYDX has a circulation of 51,006,800, and its total issuance is 1 billion. The current circulation rate is equivalent to 5.1%.
On October 6th, the exchange will distribute the mining rewards of the Epoch 1 phase. By then, the market circulation will increase to 54.84 million, increasing its circulation rate accordingly.