$10 Million Raised by Blockchain Startup dYdX
dYdX is a blockchain startup that builds open-sourced decentralized protocols in the crypto derivatives market. They were able to raise a value of $10 M gained from private investors; the aim is to design programs that allow users to acquire money from one another without using intermediaries.
Venture capital firm Andressen Horowitz and Polychain Capital were among the companies to lead the $ multi-million round of funding for dYdX.
Currently, there are 5 employees at dYdX. They are working on developing a margin protocol to be used for trading and that is based on ETH technology to deploy financial products that are based on cryptocurrencies. Examples include loan programs that accumulate short sells and interests.
The aim of the project, just like most solutions that are enabled by blockchain, is to have the products remove the requirement of any third party such as brokers when making a transaction so that the process is much faster and equally cost effective.
The company’s lead Antonio Juliano, who worked as an engineer previously for Uber and also Coinbase, said that decentralization in the finance sector will become the first real adoption based on BC tech. The ledger’s initial popular application started with an electronic P2P cash framework. Quickly many applications came next along with DEX i.e. Kyber and 0x systems. These DEX systems let the user trade using their tokens without a centralized platform such as Coinbase.
The Next Step
Juliano mentioned how there’s a lot of potential for DEX systems and that they are logically the best option for derivatives. He added that the newest contracts are expected to greatly progress upon the basic process of crypto trading currently in place, creating less fluctuations going forward within this market.
The project utilizes smart contracts with ETH technology to automate crypto trading. It also features trading settlements that are supported by the DEX systems, similar to 0x systems, to start the creation of financial derivatives.
The Potential for Shorting Ethereum
The created derivatives will be able to help traders avoid any risk and at the same time engage in unsubstantiated investments or transactions helping them deal with fluctuating markets,
Juliano continued on by saying that any developer can build upon the codebase behind dYdX. A technology firm has already recently set up an initial product on dYdX's platform, named Expo, designed for shorting Ethereum. The product is built to remove many complications with margin trading to make things easier for the customer. People shouldn’t be too concerned about acquiring a loan. ETH has reached its highest number yet with more than $60 M in outstanding amounts of short interest.