What is dYdX and how does the dYdX Chain work?

dYdX is a decentralized exchange (DEX) where people trade perpetual futures on cryptocurrencies without handing their funds to a company. Unlike most DEXs, which are apps on a shared blockchain, dYdX now runs on its own blockchain, called the dYdX Chain. The project's token, DYDX, is used to secure and govern that chain.

What is dYdX crypto used for?

dYdX is built for trading perpetual futures, often shortened to perps. These contracts track the price of an asset such as bitcoin or ether, let traders go long or short, and usually involve leverage. If you are new to this kind of product, read what crypto futures and leverage are first, because losses can be fast and positions can be liquidated.

Trading on dYdX does not require gas for each order. According to the dYdX Foundation, the only trading costs are maker and taker fees, which are paid in USDC.

What is the dYdX exchange's chain?

Earlier versions of dYdX ran on Ethereum, and v3 worked as an Ethereum layer 2 using StarkWare technology, which lowered fees but was more centralized. Version 4 moved the exchange to its own network. The dYdX Chain is a proof-of-stake blockchain built with the Cosmos SDK and the CometBFT consensus engine, and its genesis block was produced on October 26, 2023.

The design is unusual because the order book lives off-chain. Each validator keeps its own copy of the order book in memory. When you place an order, it goes to a validator, which shares it with the others, and matched trades are then settled on-chain. This is closer to a traditional crypto order book than to the pool-based model used by many other DEXs.

What does the DYDX token do?

DYDX has a total supply of 1 billion tokens. Holders can stake it directly or delegate it to validators, which helps decide who joins the active validator set. At genesis that set was capped at 60 validators and unbonding took 30 days, though governance can change these settings.

Only staked DYDX can vote on governance proposals. Voting lasts four days, with Yes, No, Abstain and NoWithVeto options. The protocol sends the fees it collects, including USDC trading fees, to validators and stakers rather than to a company. As of October 2026, fee and reward settings are set by on-chain governance and can change.

What is the dYdX Foundation?

The dYdX Foundation is a separate organization that supports the protocol and works on ecosystem growth. It says it does not run dYdX Chain infrastructure, does not control how the open-source software is used and does not vote on governance proposals. The software itself was released as open source in October 2023 by dYdX Trading Inc., a different company that acts as a development arm and does not operate the v4 network.

When the chain launched, holders of the older Ethereum version of the token, known as ethDYDX, could convert it to native DYDX through a bridge interface.