The DYDX token which provides governance for the dYdX decentralized exchange hit a new all-time high (ATH) of $27.86 today (Sep 30). dYdX has seen strong growth throughout September, nearly tripling from below $10 on September 13th. That represents a growth of 125.5% over the past two weeks alone.
What is dYdX?
Currently ranked as the 83rd highest crypto coin by market cap on Coingecko, dYdX provides liquidity and governance for the decentralized dYdX exchange which allows margin, spot and perpetual contract trading with low fees.
Some believe the growth is attributed to China’s ongoing attempts to ban cryptocurrency transactions, pushing investors to use decentralized exchanges (DEXs) which are free from regulation. These exchanges offer significant advantages over centralized exchanges that typically exist as registered compaines in a specific jurisdiction and as such are subject to local law.
China-based exchange tokens like Huobi (HT) and Okex (OKB) were worst hit by news of the ban, with both losing around 50% of their value. This was result of the exchanges being forced to close their over-the-counter (OTC) trading in China and block any new users from the country.
With no centralized operators that have to answer to local law enforcement, DEXs needn’t comply with know-your-customer (KYC) procedures or other measures put in place to control financial transactions. The effect has gone beyond just China, with dYdX briefly overshadowing major exchange Coinbase in trading volume.
dYdX founder Antonio Juliano, who once worked for Coinbase, voiced his pride at the company’s success in a tweet.
5 years ago I left @coinbase and eventually founded dYdX
— Antonio | dYdX 🦔 (@AntonioMJuliano) September 26, 2021
The decentralized trading sector is still relatively new to the crypto sphere, making up only 5.6% of total volume. This is largely due to the significant risks involved and a sharp learning curve to get involved. However, as regulators continue to crack down on centralized exchanges, we are likely to see this budding sector continue to grow.