DerivaDEX (DDX) is a popular DEX (decentralized exchange) designed specifically to service the derivatives market. The protocol has seen a lot of attention since its launch due to multiple factors including that it’s backed by one of the largest CEXs (centralized exchanges) in the world, Coinbase. As such, DerivaDEX (DDX) provides a host of features and services that make it an ideal selection for those seeking indirect exposure to the crypto market.
How Does DerivaDEX (DDX) Work
The DerivaDEX functions in a non-custodial manner. Non-custodial exchanges don’t require you to upload your crypto to a network wallet to secure returns. These systems keep you protected by keeping your crypto in your wallet until the actual point of trade. This approach has some serious benefits. For one, you’re never separated from your crypto so even if the network gets hacked, your crypto is safe.
Additionally, you enjoy far more privacy utilizing this strategy. In comparison, to trade on the Coinbase CEX, you will need to complete an intrusive KYC and AML registration process. From there, your personal data remains stored online where it can be targeted by hackers. DerivaDEX eliminates this threat by not requiring your personal information in the first place. Instead, you simply need to link and verify your network-approved wallet to start leveraging the system’s advanced features.
What Problems Does DerivaDEX (DDX) Attempt to Fix?
To understand the crucial role that DerivaDEX (DDX) seeks to fill, it’s vital to grasp the concept of derivatives. Derivatives are synthetic assets that are designed to provide real-time exposure to markets. The value of a derivative is linked to the value of the underlying asset. This strategy improves the efficiency of the entire market and provides institutional investors with a way to access markets that were previously unavailable.
Risk Exposure
Another major concern that derivatives help to reduce is risk exposure. These unique digital assets are used by professional traders in a variety of different ways. There are instances where a trader may purchase a derivative contract whose value moves in the opposite direction to the value of an asset. This maneuver can help to buffer any losses in the primary asset.
Unavailable Assets
One of the main reasons why DerivaDEX has seen impressive adoption is the fact that it provides large investors access to assets that were previously unavailable. Major hedge funds and firms have had a steady parade of clientele requesting exposure to blockchain assets. However, these firms have been left out of the loop due to the unregulated nature of the industry. DerivaDEX changes that by providing organizations open access to crypto-assets and markets.
High Fees
The rising cost of gas fees has left many in the market searching for low-cost alternatives. DerivaDEX leverages some unique protocols to help reduce gas prices. The network was built to have a very competitive fee structure that puts it in direct competition with other industry-leading DEXs.
Benefits of DerivaDEX (DDX)
When it comes to benefits, DerivaDEX users aren’t short of reasons to join the network. The protocol combines the familiarity of an open order book with the efficiency of DEX protocols. The system leverages an advanced price determination system to provide an accurate value approximation for all synthetic assets. This approach ensures you have real-time pricing when trading derivatives.
Efficient Transactions
One of the main advantages gained when utilizing DerivaDEX is efficiency. The network was built to leverage off-chain price feeds, matching engines, and liquidation operators to improve the user experience. The result is a highly responsive DEX that has a number of popular features in the market at this time.
Rewards
DerivaDEX users enjoy multiple ways to secure passive income when trading on DerivaDEX. You can secure arbitrage opportunities with ease. Additionally, there are insurance mining features and staking protocols. Users stake to the insurance fund and receive DDX for their participation. Both of these options are ideal for new traders because you can’t lose your original asset. Additionally, they provide consistent returns because your rewards are based on your participation. In this way, you can plan out your DeFi investment strategy to the finest detail.
DDX
DDX is the main exchange token for the DerivaDEX ecosystem. This Ethereum-based token leverages the ERC-20 protocol to remain interoperable and secure. DDX serves a number of vital roles within the network. For one, it’s used to pay fees. You can save on your monthly fees by using DDX when making payments. You can also stake this token or insurance mine using the asset to secure returns.
DerivaDEX (DDX) Governance
DerivaDEX is a community-ran protocol that gives its users complete control over the network’s future developments. To accomplish this task, the system uses a DAO (decentralized autonomous organization). This system replaces personnel with smart contracts and community voting protocols. The goal of DAOs is to empower users and create more cohesive DeFi communities. Today, DAOs are one of the most popular ways for a DeFi network to provide transparency to users.
Conclusion
One of the biggest reasons why DerivaDEX continues to see growing adoption is that it provides traditional firms access to DeFi yield generation strategies. These systems provide far more ROIs than traditional systems. DerivaDEX users enjoy the familiarity of popular protocols like Uniswap but with some serious protections afforded by the nature of derivatives. This strategy is ideal for onboarding these large firms and driving crypto adoption to new heights. As such, you can expect to see DerivaDEX continue to be a pioneering force in the market.
