dYdX, a decentralized finance (DeFi) lending platform, is in the process of launching a market for trading Bitcoin perpetual contracts.
First reported by The Block on Monday, the DeFi platform has already launched the alpha version of the upcoming derivatives market.
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Perpetual contracts have become very popular crypto derivatives. Though they are similar to traditional futures contracts, perpetual contracts do not have any expiry date, meaning traders can hold on to them as long as they want.
Derivatives giant BitMEX was the first to introduce Bitcoin perpetuals in 2014, but soon other major exchanges also listed such contracts due to high market demand.
According to the company, this is the first perpetual exchange on a decentralized platform and also dYdX’s first offering of a non-Ethereum asset.
dYdX’s Bitcoin perpetual contracts will offer leverage up to 10x and will be cash-settled in USDC, a USD-pegged stablecoin. The decentralized platform will also run a separate order book from all its existing Ethereum markets.
Rising demand for DeFi platforms
dYdX is one of the top DeFi platforms with a locked-in value of $22.8 million, according to DeFi Pulse, as of press time. The platform also wrote $1 billion in loans since its launch.
The platform is backed by well-known names like a16z, Polychain, and 1confirmation, raising $12 million.
DeFi platforms have created a lot of buzz lately and are seen as the real disrupter of the traditional financial market. However, these platforms still have massive vulnerabilities – both in design and security.
Recently, $25.9 million were siphoned from dForce, a Chinese DeFi platform, in 24 hours leaving only $6 worth locked in assets. Another DeFi platform – bZx – was attacked multiple times, raining major questions on such platforms security.