Author | Ryan Sean Adams
Dear Bankless Community,
Exactly two months ago, we wrote about the potential of perpetual markets in cryptocurrencies.
We asked why, despite the market opportunity, perpetual products and other derivatives represent only a small portion of total DeFi activity.
Fortunately, this situation has begun to change.
Since dYdX launched their token in August, we have seen an explosion of activity. Volume, liquidity and everything else is up and moving to the right.
This is to be expected.Token is a growth catalyst after all— We see this happening right in front of us.
With the launch of $DYDX, there are many new opportunities for those who want to get involved.
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- RSA
Guide to earning income on dYdX
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In August, the dYdX Foundation released $DYDX, further handing control of the protocol to its users. The Token has various liquid mining plans and earning opportunities, rewarding users based on their activities on the protocol.
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3 Earning Opportunities for DYDX
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Opportunity #1: Trading Incentives
The first way is the most popular - trading rewards.Through this program, 25% of the current total token supply (250 million DYDX) is allocated to active traders on the protocol, based on a combination of fees paid and open interest in each 28-day period.
Each time period, 3,835,616 DYDX were airdropped to traders. This has been a key driver in getting more traders on the platform, as users can go long, short, or whatever else perpetual contract operations are possible, while earning a nice rebate at the end of each epoch.
DYDX Tokens earned from trading rewards can be transferred at the end of each time period, however, it should be noted that there will be a 7-day cooldown period for DYDX Token holders to claim their tokens.
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Opportunity #2: Liquidity Staking Pools
Liquidity is a core part of the dYdX protocol.To facilitate this and incentivize professional liquidity providers, DYDX Token is distributed to users who stake USDC to liquidity. Any dYdX user has the ability to deposit USDC and earn DYDX, where the project holds 2.5% of the total supply (25M DYDX).
Users who choose to deposit USDC and stake it to the liquidity stake pool will receive a tokenized position, stkUSDC. Importantly, staked positions have two states: active and inactive. Active positions can be used as liquidity to earn staking rewards, but stakers cannot withdraw. Inactive positions, on the other hand, cannot be used as liquidity and do not earn rewards, but can be withdrawn by users.
Users who want to withdraw from the fund pool must abide by the timetable of the time period. Users must apply to release their USDC stake at least 14 days before the end of the current time period. These 14 days are known as the lockout period, during which no withdrawals can be requested.
With this in mind, so does the other side of the market - those who borrow liquidity from pools. The protocol has a list of community-approved liquidity providers who are allowed to trade staked USDC on the dYdX Layer 2 protocol, deepening liquidity across the market. The following entities are approved by the community and have a pre-set budget for total liquidity. these are:
Wintermute：25%
Amber Group：25%
WooTrade(Kronos)：20%
Sixtant：20%
DAT Trading：10%
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at last,We have to mention the risks of depositing in this pool. The biggest thing is that community-approved borrowers do not need to lock up collateral at any point. These are all undersecured loans.
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Opportunity #3: Discounts on Transaction Fees
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how to use guide
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transaction reward
Earning trading rewards is a fairly simple process.
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Liquid staking pool
Stakers in the liquidity betting pool can stake USDC. To do so, go to the Community Dashboard.
picture"stake"。
Enable USDC, determine what you want to stake, and complete the L1 transaction.
epilogue"Apply"。
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The launch of DYDX Governance Token is an important supplement to the dYdX protocol.
With trading rewards and a USDC staking pool, there are plenty of opportunities for those looking to earn rewards by being an active trader or simply staking USDC on the protocol.
Original link: https://newsletter.banklesshq.com/p/a-guide-to-earning-on-dydx
