dYdX Exchange — Quick Description

dYdX is a decentralized exchange (DEX) built for advanced trading: perpetuals, margin trading, and spot-like liquidity, using smart contracts and non-custodial wallets. It combines on-chain settlement with off-chain matching (depending on version) to deliver low-cost, high-performance derivatives trading without surrendering custody of funds.

Core features

Perpetual contracts: Trade perpetual swaps with leverage (varies by market).
Non-custodial: Traders retain private keys; dYdX does not hold user funds.
Low fees & rebates: Volume-based maker/taker fee structure.
On-chain settlement: Transparent margin and liquidation logic recorded on-chain.

Order types: Limit, market, reduce-only and advanced order management.
Cross & isolated margin: Flexible margin options for risk management.
Liquidity: Deep orderbooks and professional market-making integration.
Governance (if applicable): Token-based governance for protocol changes.

How trading works (high level)

dYdX lets you connect a Web3 wallet (for example, Metamask, WalletConnect-compatible wallets, or hardware wallets). You deposit margin into a margin account controlled by your keys. Orders are matched (on-chain or via orderbook) and resulting positions are represented by on-chain state — ensuring transparency of collateral, position size, and liquidation thresholds.

Fees & incentives

Fee structures change over time — check the exchange UI for current maker/taker fees, funding rates, and any maker rebates or volume discounts.

Typically has maker/taker split — makers often pay lower fees or receive rebates.
Funding rates align perpetual prices with underlying index prices.
Promotions or rewards may exist for high-volume traders or liquidity providers.

Security & risk considerations

Smart-contract risk: As a DeFi protocol, dYdX relies on audited contracts; audits reduce but don’t remove risk.
Liquidation risk: Leveraged positions can be liquidated quickly in volatile markets.
Private keys: User security depends on wallet safety—use hardware wallets and strong key management.

Getting started — basic steps

Create or unlock a Web3 wallet (hardware wallets recommended for large balances).
Connect the wallet to the dYdX interface.
Transfer collateral to your margin account and select a market.
Choose leverage, place an order, and monitor positions & funding rates.

Troubleshooting & tips

If transactions fail, check gas settings, wallet network, and contract approvals.
Monitor open interest & funding rate shifts during high volatility.
Start with low leverage until you’re comfortable with platform mechanics.