1/ NEW: USDT deposits & withdrawals are now live on the dYdX BTC Perpetual.
Effective today, we are also renaming the Perpetual Market to BTC-USD.
— dYdX (@dydxprotocol) June 17, 2020
For those who missed it, dYdX has seen unprecedented growth in recent months with the introduction of BTC–USDC perpetual futures – allowing users to go long or short on Bitcoin with up to 10x leverage in an entirely permissionless fashion. To learn more about how to use this feature, check out our tutorial here.
Today, dYdX partnered with Curve Finance to integrate the industry-leading stablecoin Tether (USDT) and it’s nearly $8B market cap as a means of fueling exponentially more volume into their perpetual orderbooks.
What’s To Know?
With this new feature, users can now deposit USDT to access the BTC-USDC trading pair. Under the hood, dYdX leverages Curve’s low-slippage liquidity pools to seamlessly convert USDT to USDC without any additional interactions by the user. Once the account is loaded, users can trade Bitcoin with up to 10x margin while earning interest on their holdings as a part of dYdX’s cross-margin lending feature.
The integration of USDT marks the first step towards a diverse pool of asset support – ultimately laying the foundation for any stablecoin to be used to access permissionless leverage on assets like Bitcoin.
I see this as a big use case for @CurveFinance. Exchanges can stop diluting their liquidity among several stable-coin base pairs and just offer USD/X, while allowing users to deposit and redeem any stable-coin. https://t.co/WavJVR1hHA
— Lasse Clausen (@lalleclausen) June 17, 2020
The integration of USDT comes in parallel with Curve recently breaking ATH’s in terms of 24H volume. For those who missed it, Curve became the DEX with the highest trading volume following the launch of COMP and the rush to farm native governance tokens using USDT.
Congrats to @CurveFinance for climbing to the top trading volume spot with $18M traded last 24 hours 🥇
Pretty crazy for a product launched in January 🤯 https://t.co/ifsecZBNmz
…where you can now also find @BalancerLabs stats! ✌️
AMMs looking pretty hot 🌶️ pic.twitter.com/kVSSKuwP24
— Dune Analytics (@DuneAnalytics) June 16, 2020
Seeing as Curve is the best place to access USDT with low-slippage at minimal cost, many traders have rushed to the platform to get their hands on the stablecoin with the highest lending and borrowing rates across lending markets like Compound.
Outside of USDT, this partnership marks another promising partnership under Curve’s belt. With the recent integration of the RenVM and the launch of the WBTC Cafe, Curve is quickly evolving into an abstraction onramp to be able to offer diverse asset support with seamless user flow.
Anyone can now seamlessly swap BTC for WBTC and earn a yield 💰
This is could be the start of something big for #DeFi
— DeFi Rate (@DeFiRate) June 11, 2020
On top of all of this, Curve recently announced their plans to release their own native governance token – meaning liquidity is likely to continue to surge as yield farmers race to scoop up the next hottest governance token on the block.
Time for a quick announcement.
Curve is working on decentralizing its ownership through a Curve governance token. All liquidity providers since the inception in January 2020 will be considered for the initial distribution proportionally.
Details on supply/demand to follow soon!
— Curve (@CurveFinance) May 30, 2020
dYdX Levels Up
On virtually all fronts, dYdX has long served as a shining example of a DeFi company with a clear path to profitability. As if added support for permissionless Bitcoin leverage wasn’t enough, this new addition of Tether is sure to give centralized counterparts like Binance and Bitmex a run for their money.
We recently released a guide on perpetual futures including descriptions on the design differences from the aforementioned centralized exchanges. The TLDR is that by using smart contracts and Maker oracles, dYdX can offer significantly faster price updates, making their futures some of (if not the) most efficient in the whole market.
If one thing is for sure, DeFi continues to shine in terms of composability. We expect this trend to be followed by many more projects and as it relates to dYdX – more perpetual asset integration is certainly on the horizon.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.