dYdX is a decentralized exchange built on the Ethereum blockchain that supports spot, margin, perpetuals trading, and lending and borrowing services. It’s one of the world’s largest non-custodial exchanges in terms of trading volume and market share.
DYDX is the governance token for the dYdX protocol. DYDX token holders can participate in the governance process, propose changes, and vote on community proposals related to various module upgrades, restorations, and grants. Users can also stake their existing crypto holdings to earn yield in DYDX or invest in DYDX tokens via popular crypto exchanges such as Kraken and Coinbase.
DYDX token holders will receive mining, trading, and liquidity providing rewards.
In 2022, dYdX cumulative trading volume peaked at $15 billion, almost double from its previous high of $9 billion in 2021.
This short guide will provide an efficient step-by-step guide on where and how to buy DYDX tokens and bonus steps on storing and tracking the tokens after you purchase them.
Let’s get right to it!
Step#1: Select a Crypto Exchange
As the demand for the DYDX token grew, so did the options for purchasing it. As of Q4 2022, the digital asset is available on an array of exchanges, both centralized (CEX) such as Binance, FTX, Gate.io, etc., and decentralized platforms (DEX) like Uniswap and SushiSwap. Visit the market page on CoinStats to view the exchange platforms supporting DYDX. Compare the exchanges’ security, user experience, fee structure, supported coins, etc., to choose the one with the characteristics you need, such as affordable transaction fees, an intuitive platform, round-the-clock customer service, etc. Also, consider whether the cryptocurrency exchange is regulated by the Financial Industry Regulatory Authority (FINRA), etc., and allows you to buy DYDX using your preferred payment method.
From a user point of view, the difference between a centralized and decentralized exchange is in functionality, reputation, security, fees, and the availability of customer support. So let's look into the details of each type below.
Centralized Exchange
A centralized crypto exchange or CEX, such as Coinbase, eToro, Binance, etc., functions as a middleman between buyers and sellers and charges specific fees for using their services. While some crypto traders construe it as a disadvantage, CEXs are generally pickier when it comes to listing new digital assets, thereby lowering the chances of coming around an outright scam.
Most crypto transactions are conducted on centralized exchanges, allowing users to buy and sell cryptocurrencies for fiat currencies such as the US dollar or digital assets like BTC and ETH and supporting direct wire transfers and credit/debit card deposits.
Additionally, centralized exchanges require their users to follow KYC (know your customer) and AML (anti-money laundering) rules by providing some information and personal identification documents. While any client can register on a centralized platform without giving up their anonymity, they have to undergo the aforementioned processes to unlock withdrawal privileges and enjoy lower fees and a wider variety of assets.
However, the drawback of trading on a CEX is that it’s highly vulnerable to hacking or cybersecurity threats.
Decentralized Exchange
On the other hand, a decentralized exchange (DEX), like Uniswap, SushiSwap, Shibaswap, etc., is a non-centralized alternative to a centralized exchange and isn’t governed by any central authority. Instead, it operates over blockchain and charges no fee except for the gas fee applicable on a particular blockchain, i.e., on the Ethereum blockchain. Decentralized exchanges use smart contracts to let people trade crypto assets without needing regulatory authority. They deploy an automated market maker to remove any intermediaries and give users complete control over their funds. This method is safer since no security breach is possible. However, the absence of centralized control is a double-edged sword. On one hand, traders get all the anonymity they can handle, with no KYC required at registration or withdrawal and access to new, in-demand assets. On the other, they take on more risk as DEXs are less critical when it comes to listing tokens, increasing the chances of encountering a scam.
Decentralized exchanges are also less user-friendly in terms of interface and currency conversion. For instance, they don't always allow users to trade crypto with fiat currency; users have to either already own crypto or use a centralized exchange to get crypto. Another drawback of decentralized exchanges is that it has failed to achieve liquidity levels comparable to centralized exchanges. It also takes longer to find someone looking to trade with you as DEX engages in peer-to-peer trade, and if liquidity is low, you may have to accept concessions on price and quickly sell or buy low-volume crypto.
Step #2: Create an Account
We’ll continue the guide using the Binance exchange as an example. To buy DYDX on Binance, you must create an account if you don't already have one. Creating a user account on Binance is simple - you must enter a valid email address and provide a phone number to set up two-factor authentication. After that, you must create a strong password, and your Binance account will get activated.
However, to take advantage of all Binance features, you must complete your KYC verification by uploading a government-issued ID and undergoing facial verification. The entire process takes only a few minutes, and you're all set to buy DYDX tokens upon completion.
Sidenote: If you choose a DEX to trade the DYDX token, all you have to do is connect an existing crypto wallet to the platform and start trading.
Step #3: Deposit Funds
Binance supports fiat currencies and accepts payment methods such as debit/credit cards, bank deposits from your bank account, and third-party payments such as Simplex.
Here’s the short summary:
- Credit or Debit Card
Linking your debit card to your crypto account is advantageous as it lets you make instant or recurring purchases, but be aware that it attracts an additional fee.
- Bank Account
It's usually free to make a bank transfer from your local bank accounts, but you should still double-check with your exchange.
- Cryptocurrency
DYDX can be traded for another currency like Ethereum or a stablecoin like Binance USD (BUSD); the trading pairs vary, and you must search for DYDX on the spot market to select a pair from the list of available trading pairs.
Step #4: Buy DYDX
Here are the consecutive steps to take if you want to place a market order to buy DYDX instantly at the current market price:
- Enter DYDX in the search bar, then select “Buy DYDX” or an alternative.
- Select a trading pair.
- Choose the payment method, the currency you wish to use, and input the amount of DYDX or the fiat amount to be spent. Most exchanges will automatically convert the amount to show you how many DYDX tokens you’ll get. NOTE: double check the amount, as the transactions are not reversible.
- Double-check the transaction details and click “Confirm.”
- The DYDX tokens will be displayed in your balance once the transaction is processed.
You can also place a limit order indicating that you want to buy DYDX at or below a specific price point. Your broker will ask you the number of coins you wish to acquire and the maximum price you're ready to pay for each once you've placed an order. The coins will only appear in your wallet if your broker fulfills your order at or below your requested pricing. The broker may cancel your order at the end of the day or leave it open if the price increases over your limit.
If you're planning to keep your newly purchased coins for an extended period, we highly recommend securely storing them in a hardware wallet.
To trade DYDX on spot markets, go to the Trade page and search for the DYDX pairs (DYDX/USD or DYDX/USDT). Select the trading pair and check the price chart. Click "Buy DYDX," select the "Market," enter your amount or choose what portion of your deposit you'd like to spend by clicking on the percentage buttons. Confirm and click "Buy DYDX."
Congratulations on adding DYDX tokens to your crypto portfolio!
Now that you’re a proud owner of DYDX tokens let’s discuss what you can do with them.
Step #5 (Optional): Store DYDX
While your DYDX tokens can be stored in your brokerage exchange wallet, experts highly recommend storing your precious coins away from exchange wallets, as those might be susceptible to hacks and interference.
We highly recommend creating a private wallet with your own set of keys. Depending on your investing preferences, you might choose between software and hardware wallets:
Software Wallets
Software or hot wallets are hosted online and are easy to set up and use. Also, hot wallets are a great option if you plan on actively trading your DYDX tokens. In short, as they are internet-connected, you can seamlessly trade your crypto without any extra steps. A software wallet is the most easy-to-set-up crypto wallet and lets you easily interact with several decentralized finance (DeFi) applications.
Meanwhile, their online nature makes software wallets more susceptible to malware and hacks. So, conduct due diligence before choosing one to avoid security issues. We recommend a platform that offers 2-factor authentication as an extra layer of security.
Examples of software wallets include CoinStats Wallet, MetaMask, Coinbase Wallet, Trust Wallet, and Edge Wallet, amongst others.
Hardware Wallets
Hardware, or cold wallets, are considered the safest way to store cryptocurrencies, as they offer offline storage, thereby significantly reducing hack risks. They are secured by a pin and will erase all information after many failed attempts, preventing physical theft. Hardware wallets also let you sign and confirm transactions on the blockchain, giving you an extra layer of protection against cyber attacks. These are more suitable for experienced users who own large amounts of tokens.
Ledger hardware wallets are arguably the most secure hardware wallets letting you securely manage your digital assets. The Nano X is designed for advanced users and offers more storage space and advanced features than Ledger Nano S, designed for crypto beginners.
A hardware wallet is more expensive than a hot wallet, with prices ranging between $50 - $200.
Examples of cold wallets are Trezor Model T, Ledger Nano X, CoolWallet Pro, KeepKey, Ellipal Titan, and SafePal S1, amongst others.
Step #6 (Bonus Step): Track Your DYDX
The crypto market, and, by extension, DYDX price, is volatile. Utilizing a portfolio tracker will help you keep track of your DYDX tokens and all your crypto investments from one platform at all times. CoinStats offers a top-notch crypto portfolio tracker helping you keep on top of the ever-changing crypto landscape while tracking your multiple crypto investments simultaneously. You can find more information here.
You can also monitor the profit, loss, and liquidity of DYDX across several exchanges on CoinStats.
CoinStats supports over 250 cryptocurrency exchanges and over 7,000 cryptocurrencies. It offers charting tools, analytical data, advanced search features, and up-to-date news. Here you have the opportunity to connect an unlimited number of portfolios (wallets and exchanges), including
- Binance
- MetaMask
- Trust Wallet
- Coinbase
- Kraken
- Kucoin
- Bitstamp and 500 others.
To connect, go to the CoinStats Portfolio Tracker page and:
- Click Add Portfolio and Connect Wallet.
- Click the wallet you want to connect to (e.g., Ethereum Wallet).
- Input the wallet address and press Submit.
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