The dYdX Boom | Antonio Juliano (SotN 10/4)

Transcript

hey bankless nation welcome to another state of the nation super excited about the topic today and the guest we have david why don't you give a quick preview who are we talking about what's this about antonio giuliano from dydx who will be on the show for the third time because dydx continues to just deliver absolute groundbreaking uh just metrics and landmarks when it comes to decentralized trading now on layer two and so that is really the the story of this week is that dydx has been doing more volume than coinbase and coinbase is the leading centralized exchange and not only say that again yeah you say that again dydx

a order book based exchange that lives on an ethereum layer 2 is doing more volume than the world's leading centralized exchange and also all other d dexes on ethereum combined right and so this is an amazing success story out of a project that has been grinding for years so well deserved to the dydx team and i feel like after one once you have like more volume than coinbase or more volume than the leading centralized exchange like we have a bunch of lessons to learn about how that story unfolded and so that is what we have to tell it today sorry yeah exactly that's the question this meteoric rise how did they do it what i love about this story too is uh no sacrifices and

decentralization were made like no no no harm to decentralized protocols in the making of dydx which is absolutely fantastic because there's so many like other alternatives out there that um sacrifice on decentralization and say hey decentralization is not what users want not what users care about but dydx is uh prioritized it the entire time right and now this uh this success it feels like an overnight success but it's really been like a five-year overnight success um i think a huge catalyst was uh the launch of layer two but i'm going to we're gonna let antonio tell us more of this story so we'll get to that in a

minute one thing i'd like to remind bankless listeners if you are a uh bankless listener and you want some let's see let me see if i can share this so you see my screen here david yeah i see your spotify okay exit that real quick all right what i was going to show you is this this is a bankless referral if you are a dydx user and you don't know about this or you want to become a dydx user we have a referral code for you to save 10 in the show notes you can check that out as well just another gift from the bank list team uh go check that out but before we get to the main conversation david let's talk a little bit about what's new in the bankless community right now uh mariano conti on layer zero this new

podcast where we explore the people behind crypto david that episode came out this morning i haven't listened to it yet i listened to all of them i haven't listened to this one yet give us a preview of what's in that conversation yeah the the really the fun part about the conversation we and we talked about so many things but uh mariano ha he hadn't really like worked very very hard very much before ethereum and something about ethereum turned him into an absolute grinder one of the leading smart contract devs in all of ethereum so uh the story behind mariano specifically on that told in layer zero is like why did ethereum make mariano a hard worker uh when he wasn't that wait wait wait so you mean he he wasn't working very hard

you mean he was like kind of lazy is that how he he's definitely not lazy he's definitely not lazy now and so like yeah that's the story is like the story we told is the transition between uh being not a hard worker to one of the hardest workers in d5 wow yeah i'm looking forward to listening to that we also came out with a podcast on monday with um devin fincher who is the uh founder of openc that's an incredible i i think uh unicorn of the year maybe although dydx is a contender for that i don't know but uh you know open seas had just an incredible year no signs of slowing down like three billion in uh transaction volume for the last two months and uh catch that episode if you want to

understand why and how they are actually doing it david we've also got to give a shout out to zerion who is doing some magic in the nft landscape i use xerion for all sorts of things viewing my crypto portfolio uh viewing my d4 d5 portfolio but now they actually have a way to showcase nfts i'm looking at your oh my god everybody goddamn i need to get rid of accidents you can't just keep them in here you know just pass them to your kids at some point in time hand them down and you know it's super cool i haven't um i haven't fully done this yet but i want to i want to borrow my wife's apple watch i don't have one but check this out

you can use xerion to actually add your nft to be the faceplate of your apple watch that takes like 20 seconds to do that we want better ways to flex our nfts to the world and i guess putting it on your apple watch is is an underappreciated and then and now available tool to all uh nfc flexors out there absolutely so flex your nft with style use xerion go check that out there's a link in the show notes uh to that where you can find all sorts of more information david i've got to ask you the question i ask before every state of the nation as well which is what is the state of nation today sir this one's kind of a cop-out but the state of the nation is decentralized

because more trading volume is going on dydx was a date which is a decentralized exchange then going on on coinbase or any other centralized exchange and so this is a huge victory for the world of being bankless and being self-sovereign uh and that is all thanks to the power of order book base and order brook base exchange on the layer 2. uh so today the bankless nation is a little bit more decentralized you know what i'm going to i'm going to plus one that because you know i was doing right before this episode i was reading up on uh paulina if you've read anything that paulina has written he's a poster on eat finance also has medium but it made me so bullish on like layer twos and where that's going just so like a wealth of

information and resource i think people are underrating layer two right now ethereum layer two specifically and we're in the season where they're overrating alternative layer ones that compromise on decentralization so yeah state of the nation is decentralized we're going to get into that in just a moment with antonio talk about the dydx story but before we do we want to thank the sponsors that made this episode possible bankless is proud to be supported by uniswap uniswap is a new paradigm in asset exchange infrastructure instead of a cumbersome order book system where trades are matched with other humans uniswap is an autonomous piece of software on ethereum which is what ryan and i call a money robot no human

counterparties or centralized intermediaries just autonomous code on ethereum input the token you want to sell and receive the token you want to buy something brand new in the unit swap ecosystem is the uniswap grants program is now accepting applications for grants we have been saying this for a while and will say it again dows have money and they are in need of labor if you think that you have something to contribute to the uniswap dow apply for a grant to uniswap just look at the size of the uniswap treasury it's almost three billion dollars this mountain of capital is looking for labor do you have something of value to contribute to the uniswap dow no matter how big or small your idea is you can apply for a uni grant at unigrants.org and help steer

uniswap in the direction that you think it should go that's exactly what we did to get uniswop to be a sponsor for bankless and you can do the same for your project thank you uniswap for sponsoring bankless the era of proof of stake is upon us proof-of-stake systems like ethereum terra and solana allow the industry to move away from the hot loud and wasteful proof-of-work systems and return back to a cottage industry of individual stakers and individual validators and that is what we need to make this industry stay decentralized individuals must play their part in crypto network validation and that is what lido is here to do lido makes staking accessible to everyone at the click of a button by delegating your stake to lydo's network of nodes you can access the yield offered by proof of

sake systems and claim your share of the network transaction rewards do you have 32 eth and want to stake it to ethereum but running a node sounds intimidating or maybe you have less than 32 eth and you need to pool your eth with others so you can access baking yields lido offers a solution for both simply go to lido.fi choose which assets you want to stake and deposit them to the lido validating network lido is working to make sure proof of stake stays as decentralized as possible and is committed to decentralizing its own validating network to eventually become a completely permissionless protocol so if you want to stake your eth terra or soul and get liquidity on your stake go to lydo.fi to get started all right guys we are back with antonio

giuliano he is the co-founder of dydx he's previously an engineer at coinbase but five years ago antonio antonio quit coinbase to build dydx now dydx has passed coinbase in 24 hour volume that's a crazy story we've had antonio in the show before twice but we keep bringing him back because he keeps delivering these crazy results and dydx is probably i don't know the story of the month of september so uh antonio great to have you back how are you doing sir doing really well thanks so much for having me and excited to be on yeah well look you tweeted this out this is like a milestone type tweet um tweet this out the 26. you said five years ago

i left coinbase and eventually founded dydx today for the first time dydx is doing more volume in trading volume than coinbase absolutely crazy can you get like hot first of all how does that feel and and give us a sense of like um you know did you ever think you would be here yeah i mean i definitely did think there was a good chance we would be here at some point you know it's certainly not a given when you're building just a really innovative exciting new project in a really new space but this is kind of what we've been talking about for the whole time you know us and everyone who i think is excited about d5 just the potential like the reasons to use it long term

um the potential growth opportunity with token launches which is obviously played into this in a really big way didn't quite think would happen this soon but as you guys were alluding to in the intro it's certainly been a long grind on uidx but i think we have set ourselves up really well for success and that's always exciting it's really nice to be able to compare trading volume between coinbase and dydx just because like it's apples to apples but also coinbase and dydxes platforms are different platforms uh so maybe can you help the me and the listeners kind of just compare and contrast the differences behind coinbase and and dydx most notably in my mind like the availability of assets i think is a lot

lower on dydx which makes those volume numbers even more impressive and then also can you maybe clue us into like the number of users that are trading on dydx and if you do know the numbers on coinbase how those compare yeah great questions so i think there are a number of key differences between dydx and a platform like coinbase obviously the biggest difference is that dydx is decentralized non-custodial transparent all the good stuff you guys really preach and i'm sure the listeners can appreciate um and then the other really big difference between dydx and a platform like coinbase is dydx is focused on financial derivative products and specifically perpetual contracts whereas coinbase for the most part is focused on spot trading spot trading is

sort of just a fancy word for regular old buying and selling of assets um have touched on this before on the show but just a quick recap of kind of what financial derivatives are and why we're really excited about them um derivatives are synthetic products um which can be created on top of any asset synthetic basically means when you're trading a derivative you're not actually trading the assets um you know that you know are under the hood so if you're trading like a bitcoin perpetual there's no actual bitcoin being traded or kind of being held on dydx or any other platform you may be trading perpetuals on but there are these kind of financial incentives financial mechanisms which effectively make these uh derivative products trade at the price of the

underlying asset and that's really what we've created on dydx and the reason people are so excited about derivative products and the reason they've been taking off in a huge way in cryptocurrency even before dydx has been that you can trade them with leverage and kind of what the concept of leverage means is that you can come to an exchange with say a hundred dollars and say you went to coinbase with a hundred dollars you could buy a hundred dollars worth of bitcoin and that's great you know we all want to buy bitcoin but if you come to dydx or you know a different platform that offers leveraged trading and you are you know willing to lever up you could buy say 500 worth of bitcoin or a thousand dollars worth of bitcoin with your 100 through kind of the power of leverage um

it's not without risks there are risks with trading on any leverage platform but you know for the most part that's what's been driving a ton of volume to these derivatives exchanges over time um the biggest exchanges in the space by trading volume uh in the past year or two have been finance and ftx and their trading volume has really been dominated by you know trading of these derivative products and that's really why we're focused on derivatives at uidx you know zooming all the way out our highest level goal at tydx is to become one of the biggest exchanges in crypto period centralized or decentralized but kind of on a three to five year time horizon and that's what's really informed our focus on derivative products because basically by definition if you

want to be the biggest exchange in crypto you must support the biggest trading markets and those are already and you know will continue to to be derivative products um obviously we're making a really big bet on decentralized exchanges i'm sure we'll touch a lot on why we're all really excited about decentralized exchanges but i'd say those are probably the biggest differences between dydx and coinbase um certainly there are other differences as you mentioned coinbase supports more markets than dydx does however we've actually been improving on that quite a lot recently i think we're up to like 27 or so markets now i haven't checked how many coinbase has but yeah i think it's like 50 to 100. um but i think last time we spoke on the show dydx had on the

order of like five markets and i think we talked on on the show back then about you know all this stuff that we were working on uh from a tech perspective to enable us to launch in a lot of new markets that's driven a lot of growth and sort of that thesis has come true so you know still not quite to the the level of a coinbase or especially like a binance or ftx on the number of markets but what i would say there is most of the trading volume in crypto happens on the top assets um so you know bitcoin and ether just drive most of the trading volume and the space adjust those two so as much as we're able to capture that on dydx i think we have been successful there so yeah a lot there i'll stop there for now but i'd say those are kind of the

biggest differences between the two i think another difference i'd like to highlight is that dydx doesn't have a native fiat on-ramp and coinbase does and that's definitely why coinbase is optimized for spot trading rather than rather than these uh perpetuals which makes it even more astounding that dydx has beaten coinbase with trading volume because coinbase has hooks into everyone's bank accounts whereas dydx is it's kind of like the hard way where you actually can only take money from l1 ethereum and have that be deposited and that has also changed the probably the user profile both in the nature of what the products are on dydx and also how you get there it's probably also changed

the nature of like what users are actually using dydx so maybe just to finish off adding color to the nature of dydx could you also talk about like the general user profile who is trading on dydx uh are the amounts that they're trading on dydx more than you would find on a centralized exchange like coinbase what's just the nature of the user profile on dydx yeah absolutely so again because we're focused on these financial derivative products these types of products are just fundamentally more complex than products you'd find on a normal spot exchange like coinbase and therefore the types of users that are trading on dydx um are much more advanced than call it like the average coinbase user dydx really isn't targeting somebody who has bought you

know their first hundred dollars worth of bitcoin in the past week it's really much more targeting people that have you know been in the space for a while understand financial derivative products or at least want to learn about them um and i think that manifests itself in our metrics in a couple different ways i don't really know what coin basis numbers look like i would sort of guess their you know number of active weekly traders is probably in the hundreds of thousands to you know maybe low single-digit millions on uidx just sort of for comparison on an order of magnitude i believe we have about seven or eight thousand weekly active traders um but as you say they're pushing much much more volume on average than sort of like the average coinbase user is

so the the users that we're capturing are much higher value on average um there are a couple different profiles i think uidx is targeting both uh international advanced individual crypto traders you know people that likely have traded derivatives and perpetuals on other platforms like finance or ftx before and then dydx is also targeting in a big way uh sort of all of the top crypto trading funds in the space one of the other really exciting things and probably the thing that i've been most excited about with all the uydx growth recently is that almost all of the top crypto trading funds um have already integrated with uidx or at least are sort of like talking with us about integrating and

that's really exciting because i think that's where the real trading volume and sort of the real value capture comes from dydx will always be a platform both for individual traders and let's call it like crypto institutional traders but i think a lot of these you know more crypto institutional traders had traditionally been hesitant um to enter d5 or you know there wasn't enough trading volume or activity there to make it make sense for them and that's really starting to change right now with uidx and i think that's really exciting that's awesome and i think that leads into uh the next question we we have for you which is like what do you attribute to the recent success of dydx you guys have absolutely exploded over the last

few months in particular um we have a few theories as dave and i were talking about this um conversation and i i wonder if you'd like to weigh in on these theories but then plea please like you know that like you know best on why you're actually growing the way you're growing but the first is the release of layer two i mean we've seen this story elsewhere with um actually infinity most recently not quite a layer to a side chain but layer two lower gas prices um super important for scalability this the second is the dydx token and of course we know tokens are like steroids for growth and so duidx has injected some of those steroids maybe with a

recent release of the dydx token and the third is maybe an increased focus on decentralization this comes out of you know some of the the shutdown of centralized exchanges in china kind of um where is that volume going when it leaves uh huobi for example maybe maybe some traders are re-evaluating the importance of decentralization maybe some of that liquidity and volume is actually leaking into defy give us your thought on on any of those and then also tell us the real reason that that dydx has had such explosive growth this year yeah i mean i think you're spot on those are the top three things i would pick to

focus on as well but maybe adding a bit more color to that for those who aren't familiar with the dydx protocol token was released about two months ago by the dydx foundation and that has just obviously driven a ton of growth to the platform i think i probably even said this last time i was on the show but my mantra has always been you know dydx has been around for four years now so why did it take so long for the uidx token to be released and my thesis on this had always been that yes tokens can be just massive like order of magnitude growth drivers for a platform but the way you really get big like the way you like really capture a

lot of volume is you start by first of all making a great product um that is already growing organically um that has real use cases for people to to be able to use it and you also build a scalable product because just imagine if like you know the dydx token had been released but dydx were still operating on ethereum layer 1. that growth would not have happened you know one really exciting statistic is we were only on dydx pushing multiples of all of the transaction volume on ethereum combined and i think we probably still are so you know it's sort of by definition that growth could not have happened on layer one ethereum so again we talked about this on the show before and i'm sure we'll touch on

it again but as you say that launch of the layer 2 product was i think a really big step up for us in a couple of different areas that are super important scalability obviously the product experience is way better there's instant trading cross-margining things and features users care a lot about and that product was already growing organically before the token launch and i think that's important and then you know fast forward to two months ago when the dydx foundation released the dydx token and i think the foundation did a really great job of just creating a lot of these liquidity mining programs um liquidity mining empirically has been super successful for a lot of different uh protocols in the space

um so it's not really rocket science but the thing that's hard i think um is what are you incentivizing with your liquidity mining programs are you incentivizing the right things and i think that's the real critical question and the thing i think you know the dydx foundation got right in the launch of the token there are quite a lot of different liquidity mining programs have to dive into any of them there are liquidity mining programs for traders on the exchange there were liquidity mining programs for you know past users of the platform liquidity mining programs for market makers which has driven a massive amount of liquidity to the exchange there are staking pools and i think all of these together really play into incentivizing exactly the right

behaviors that we want to see and that are valuable on dydx um so i've been really excited about that and then sort of your third point i think that's valuable as well i think that's sort of like the lesser points not that it's not important but i think that's just something that continues to happen over time as more people see the value of decentralization whether that's for transparency self-custody you know censorship resistance and i think that's what makes us excited about the long-term growth prospects on the platform to what you said about the token the the beauty about tokens is that you can specifically engineer the incentives that you want uh out of a token that's just a tool that some some centralized

exchange like coinbase and and ftx just can't really can't really figure out by the nature of their centralization and uh so it sounds like we're all on the same page about where the success is coming from but antonio if i can pin you down to actually put some numbers behind this thing can you like divvy up percentage-wise what what amount of the recent dydx success can you attribute to the layer two was that like fifty percent of the success eighty percent of the success what about the token twenty fifty percent like what if you had to divide up the pie of the success where where is uh the success coming from i mean it's a great question it's a little bit hard to say because i think those two are really multiplicative with each other you know i don't think

they're like additive um and i think that makes it a little bit tough to like put specific percentages on it you know let's just take the world where like i said dydx is still on layer one with our old layer one product and the token was released on top of that product i think there would have been a good amount of growth sure but you know by definition we wouldn't have been able to scale to more transactions per second than all of ethereum and likely we wouldn't have seen even close to you know i would i would guess probably our volumes would be in like the tens of millions or maybe hundreds of millions of dollars um and now we're in sort of the low single digit billions of dollars um you know but but also empirically like we had been operating on layer two for a

while with more or less the same product um before the token it's getting better all the time but it's like more or less the same before and after the token um and i think before the token we're seeing daily volumes in roughly the 100 million dollar range and then as i say the you know now we're seeing volumes in the the two billion dollar a day or so range so empirically it's driven like 20x growth for us in the past month or so the that growth is definitely being showcased very very well by the tvl chart for dydx which uh here it is uh i joked on twitter uh a little bit yesterday when i tweeted out this graph that it literally looks like the up chart emoji it looks like the same shape

and so and um again i kind of want to return to almost the same question to what degree is this layer two incentivizing lockup in what degree is this yield farmer yield farmers seeking the incentives out of the token and where have you seen token incentives really shine when it comes to attracting yield like what are they when they because there's so many different ways to do to do like dydx token yield farming on dydx because there's so many different ways to pay out incentives which ones have really resonated with the people that are seeking the dydx token and is that why we're seeing all of this lock up as well yeah i think that's a lot of it so so let me maybe at a high level just go through like all of the different uh

liquidity mining programs that were launched alongside the token because there are a couple of them and they are complex so feel free to just stop me and ask questions at any point um so it's kind of the first and most basic but also probably most important liquidity mining program is what we call trading rewards um this is effectively just incentivizing users um there's like a fixed amount of dydx tokens that are allocated to this program per month and then everyone gets a trader score on uidx every month and your trader score is based off of the amount of fees that you paid on the platform multiplied by your average open interest on the platform over that month and average interest all that means is like you know the amount of positions

you know if you hold like a thousand dollars worth of bitcoin on dydx for a month then your average open interest is a thousand dollars so you take these two things and you multiply them together and you know out of that you get a score and the reason you multiply them together um is that you know you need both of these things you need to be both actively trading and paying fees and you need to you know just you know hold positions on the exchange so you could make a trade on dydx and exit it immediately but then your average interest wouldn't be too high and the other reason that it was set up this way is because these numbers are hard to fake right you know you literally have to pay fees on the exchange and you literally have to lock up capital to you

know hold open interest um on the platform so it's really incentivizing and driving for the most part really organic uh volume uh in incentivizing like the way users were already trading on the platform and on the exchange and i think that's that's pretty ideal um so that's kind of the first and most important liquidity mining program um another really important one that has driven just huge success to the platform so far has been uh there's a separate liquidity mining program just directed at market makers on the platform just a really quick overview like who are market makers what did they do and you touched on this before dydx is an order based order book based

decentralized exchange what an order book is is it's basically just a sorted list of all the prices people want to buy and sell at so when you're trading on dydx or any other order book based exchange you're trading against other traders on the platform and for the most part you're trading against market makers these professional trading firms which you know their whole job is to provide liquidity to people who want to trade on exchanges and to kind of put some numbers around this and uh you know explain why this is so important liquidity is quite literally the most important thing to an exchange and the most important thing to traders on an exchange because it's literally the price that you get when you're trading on the

exchange you know if exchange a is offering to sell you bitcoin for a thousand and one dollars exchange b is offering to sell you bitcoin for a thousand dollars of course you're just going to go and trade on the exchange that's you know willing to sell it to you for a thousand dollars just more liquidity gets better prices for traders and that's what traders care about obviously so anyways liquidity is super important for an exchange uh to put some rough numbers around this roughly dydx had around one to two million dollars worth of depth what depth basically means is like how much can you buy within a certain amount of slippage or you know within a certain percent of the mid market price um we had about two million dollars before the token launch of depth on on the eth

markets and to put it into context binance which is the world's most liquid exchange has about 25 million dollars within one percent of depth on their bitcoin perpetual which is the most liquid product in the world or in crypto at least um fast forward to now dydx has created this liquidity mining program which quite literally incentivizes market makers based on their performance and one the other sort of more complex but one of the things that i'm most proud of that the foundation did um is the the foundation came up with this score for market makers on the platform as well which looks at all of their orders that they've placed on the platform for the entire month and comes up with one numeric score and

this is important because by coming up with this one numeric score you can divvy up these market maker rewards um in sort of a perfectly incentivized way the score is complex but it's based off of a comp you know combination of the uptime that they're willing to provide so you know this market maker is quoting 99 of the time that's better than if the market maker we're quoting 90 of the time it's based on the spread that they can provide spread means sort of like the the amounts that you have to to pay them to trade uh against their orders based on the amount of depth that they can provide you know zooming out effectively there's a liquidity mining program that is targeted at market makers fast forward to now and one of the the

craziest things that i think has happened to be honest in the past month is dydx is literally the most liquid exchange in crypto by a lot right now um you know that two million dollars of depth that that i talked about before um fast forward to now and that's 40 million dollars of depth um within one percent on our bitcoin perpetuals and finance has 25 million um so yes it's literally we're the most liquid exchange in crypto and perpetuals are the most liquid products um in crypto and i think that's been driving a lot of activity to the exchange as well um other liquidity programs like staking pools that i can you know touch on and go into but but that was kind of a lot so i'll stop there for now but you know

i think those are probably the biggest things that have been driving a lot of growth yeah you know what i'm super like maybe sort of a learning lesson kind of coming out of this and hearing you talk is that uh dydx is very very intentional uh intentional about its you know token strategy and its token incentivization strategy like this is one of the most complex uh but but also i guess um you know high leverage token schedule liquidity programs that that i've seen and you guys were very intentional about waiting to release the token until you were sort of ready for that growth and then the specif the specific areas that you wanted to apply the token to

that would benefit the protocol most it's very precise i see a lot of token strategies that are just kind of shotgun here you get a token you get a token and what what are we rewarding what are we incenting oh i don't know users but like dydx has taken a very precise um like i guess token strategy and you're you're injecting it in the steroids i guess in the right parts of the body to to increase that muscle mass um i i want to ask you this question too it's like um i feel like with ui dx's success this year in the whole decentralized exchange category we're seeing a return of the order book okay so i remember the story of like web van

which was a com company wanted to deliver like groceries to your house right uh early 2001 they went belly up it was too early the internet wasn't ready consumers weren't ready now we see how many different web vans that have been successful like 20 years later right we've got ubereats and we've got you know almost every grocery shop retailer delivers to your house now it's just like timing is a huge factor in the success here and i think we've seen something similar with order book exchanges at least decentralized order book exchanges right the very early stages of um uh of defy we had what was that exchange i don't know why it's escaping me ether delta in my head

thank god do you remember ether delta uh what a mess that user experience was order book exchange all on chain uh we saw that we saw you know dy dx's early efforts nothing took off until automated market makers and uta swap really like crushed it on that angle but now i feel like we're seeing this resurgence in order book exchanges like decentralized non-custodial order book exchanges and i'm wondering if you can kind of reflect on that do you think order book exchanges have made a comeback and will now be the most dominant decentralized exchange in crypto how do you think it plays out between automated market makers which have been very successful in d5 and order book exchanges and where

do these two things fit yeah great question and also again i think you're spot on with the timing piece i 100 agree with that um i think the most important thing in startups and tech in general is timing you know there are lots of good ideas out there but it's irrelevant if you haven't a good idea if it's you know not created or you know pushed at the right time and i think you know amms really took off and certainly i'm not the first person to say this but because of unislop and because uniswap was able to offer trading of all of these new tokens that weren't available to trade elsewhere automated market makers are really good and i admit uh they're much better than order books at providing liquidity on sort of the long tail of markets um but

and i've always said this and i think it's really starting to come true now um order books i think very strongly are much better at providing liquidity and much better providing a good user experience on call it like the top like 100 to 200 markets by volume i think you see this play out on centralized exchanges all the centralized exchanges use an order book based model for a reason right um and again like zooming all the way out uh just because so many things are that that we do at uidx are impacted by this high level directive we want to be the biggest exchange in crypto like period but like you know on a three to five year time horizon and again so like let's just think about uh what we need to do if we want to get there

we need to sport derivatives obviously we talked about that but also as i touched on before most of the volume in the space goes through these like top 100 or 200 markets certainly there's a long tail of sort of like you know random or smaller cryptocurrencies that are valuable to trade and there should be platforms on which users can trade these assets but if really the thing we care about at uydx is just becoming the biggest exchange then we need to support the best possible user experience and the best possible liquidity for these top markets in crypto and the way we do that is through order books and i think that has really played out for for us and you know the liquidity that we've been able to generate and you know sort of the the crazy stats around

like the level of liquidity we have right now where the where the most liquid exchange in crypto uh you wouldn't be able to do that on an automated market maker you'd sort of just need like so so much capital to be able to do that um you know order books are able to support much more advanced order types like stop orders limit orders all these different things that professional traders need like you know i think for the most part like jane street or something like that isn't just gonna come and trade on like automated market makers like quite as much as they're likely to trade on order books um so i think just order books can provide this higher level of user experience for professional traders and for more advanced users but my point is

like that's where i think the real volume in crypto is certainly at least for now you know tldr or tbd uh whether that will be the case you know five to ten years from now in crypto like i could be wrong but i think it just makes the most sense for us to start with like the highest value markets that we could capture um and build the best possible product around them and for me that's order books so antonio now you said this twice we got to dig in uh you really think it's possible for dui dydx to become the largest exchange not just decentralized exchange but the largest exchange that that means beating out ftx beating out binance you've already beaten coinbase a little bit right but like you think that's actually possible i i get the sense from how you

you're speaking it's not just aspirational like you're you're kind of serious about that tell me how that happens yeah i mean obviously we've seen a huge amount of growth in the past month or two um and that's super exciting but maybe to put things into context like where are we actually at right now yes we did more volume than coinbase um you know for a couple days i think we're sort of like trading back and forth with them now i'm doing more volume versus less um we're still a good ways off from like a binance finance is roughly doing like 75 billion dollars a day in volume and dydx is at 2 billion so still a long way to go ftx is at like 15 billion a day in volume or so um so yeah we've got to grow by you know another 50 to 100x if

we want to be one of the biggest exchanges in crypto um but again i think it really is possible um again it has to start in my mind at least by definition with derivatives trading because already and in literally every single mature financial market there's more volume and more value capture in derivatives trading and there is spot trading so that's why we're focused on that so let's just start with that i think the real bet that we're making is that decentralized exchanges and obviously specifically dydx will beat out centralized exchanges on some timeline you know it's hard to say exactly what that's going to be but i always sort of say roughly it's like you know we want to be the biggest exchange in three to five years from now and i think we're making a couple bets there we're betting

on the technology continuing to improve we're betting that we'll be able to continuously improve the product we're betting we'll be able to continuously improve on like the amount of decentralization we can offer our users um we're betting on you know sort of what happens uh sort of like a regulatory crackdown perspective with centralized exchanges um but i think there are a lot of reasons to at least think that there's a realistic shot i don't it's hard for me to give percentages but you know somewhere in the like 10 so like i don't know if i'm being realistic like 35 percent chance um that i think dydx becomes like the biggest exchange at some point i honestly believe that maybe people think that percent is like too high

um but i think there that most people can believe at this point that there is a shot right you know if we just assume that like the technology works out um the product experience can get better and better and better already we have the best liquidity so i think that's like you know been been disproven already that decentralized exchanges can't have as good liquidity as centralized exchanges and i think that there's a lot to be excited about at least and for me it's like exciting to work on something that has this like you know multiple orders of magnitude type growth potential that's just what's exciting to me sort of in life and it's like you know it's not a given but like i think there is a realistic shot that we could be one of the biggest or the biggest like crypto exchanges and sort of therefore

like one of the biggest like protocols or companies or whatever in the world at some point and that's exciting to me so let me ask like how are you going to do it without tom brady yeah i mean like so fbx of course for people who aren't familiar um they have like celebrity endorsements now they're paying professional athletes and celebrities a lot of money slapping slapping their logo on top of stadiums all the mlb empires have ftx right on their on their chest they're they're playing the you know the centralized exchange game and they're playing it very well you know we often call them kind of you know neo banks like they're crypto banks aren't they and um i guess the bet that dydx is making is

that people will prefer decentralization and maybe like first users but also you mentioned something super interesting in there it's like maybe regulators will prefer decentralization so like can you do this without tom brady or do you intend to like go get the athletes and the celebrities and you know play that game too what's your take wait win dydx arena that'll be the day um you know maybe someday you know i won't i won't throw that opportunity or you know that possibility out the window um at some point it'll make sense for us to grow and to call it more like mainstream like international users and a good way to do

that is with advertising celebrity endorsements and things like that um but for us like i said the obvious growth opportunity right now is people that are already trading crypto like binance has 75 billion dollars a day ftx has 15 billion dollars a day dydx has two um so let's just grow into like finance and ftx as users for at least the next year or two and that is a ton of growth potential right there so you know that's sort of like answer to the question why not dydx arena today um you know maybe at some point in the future once we've grown a little bit more um and need to get a little bit more into the the mainstream conversation but there's a huge amount of growth opportunity just with the people that are in crypto right now and that's really what we're focused on

um in terms of the regulatory piece it's tough for me to say or kind of dive too much into like publicly but i definitely you know i've said this before publicly and i honestly believe that there are a lot of things that i think regulators care about that are positive about decentralized exchanges regulators care a lot about transparency regulators care a lot about solvency of the systems that users are trading on and i think decentralized exchanges do a much much better job with that than sort of these black box like international centralized exchanges do so i think there's a lot to be excited about there and just generally i think there's a huge amount of growth opportunity for dydx and we're excited about that

that's that's really cool to hear guys we have a lot more to cover with antonio we're going to talk about why defy in general and antonio's thesis around that building on layer 2 as well talk a little bit more about regulation and dydx in five years time but before we do we want to thank the sponsors that made this episode possible when you shop for plane tickets you probably use kayak expedia or google to compare ticket prices so why would you limit yourself to just one exchange when you trade crypto when you make your trades you want to make sure that you're getting the best possible price on your trade and that you aren't paying high gas costs that you could have otherwise avoided that's why you should be using matcha matcha routes your orders across

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giuliano from dydx talking about the dydx story and where we left things before the sponsor break we were talking about how dydx might compete and might beat and win against the centralized exchanges the ftx's of the world but i feel like we haven't really nailed this point home yet and i know you guys have been on a trajectory like you could have gone the centralized route at any point in time you could have thrown in the towel and said this decentralization stuff is too hard ethereum's not scaling you'll see you later we're turning centralized but you didn't you stuck to this roadmap and i want to ask the question of why defy to you antonio why why is it important for an exchange like dydx to be

centralized in the first place why do you think that's a killer advantage and uh yeah just tell us why yeah it's a great question and first of all maybe just to say something a little bit like counterculture the most important thing to me is that dydx is that we hit this a goal we have set for ourselves of bydx being one of the biggest exchanges in crypto on the five-year time horizon that means being centralized like we've honestly thought about that in the past obviously we haven't done it but like you know we've thought about well okay maybe like you say like oh if the ethereum doesn't work like should we just switch to being like a centralized exchange sort of do what ftx did but i honestly believe that like the highest probability way that we can win

and that we can be one of the biggest exchanges on that sort of timeline is by being a decentralized exchange and i think that's really exciting and the reasons why we're excited about that are a couple of things um and probably they're you know along the theme of what people are excited about with decentralization in general first of all decentralized exchanges as i touched on before transparent and this is really important to traders and really important um to you know advanced users to uh trading funds um i think you saw this play out in traditional finance in a really big way in sort of a bad way with sort of the you know robin hood gamestop saga of a couple months ago where you know robin hood delisted gamestop and people were super upset

about that and fundamentally they didn't understand the rules of the exchange that they were trading on um and there was the central authority which kind of had the capacity to to censor trades or you know inform like how users could trade but by being a decentralized exchange and by having the power to quite literally just encode into code that's running on the the blockchain the rules of the platform um rather than you know using trust or using like complex legal contracts that's a really powerful thing and allows us to bootstrap trust on the system much more effectively because we're not sitting here saying hey trust us we promise not to steal your money or screw you over instead it's just like look at the contracts

look at the auto reports um and that's a really effective way for us to boost trust it's much more secure as well to trade on a decentralized exchange to store your own coins in your own wallet i think that's important to a lot of traders and the other really important thing that i think decentralized exchanges have and that now we've started to have with uidx is the concept of community ownership of the platform the community can quite literally own the protocol that they're trading on and this is really really different and fundamentally different than you know pretty much any other business in history but if you look at something like a binance where you know cz owns i don't know what it is like whatever like 20 to 40 percent of finance like sam owns i think like 53 of ftx um whereas

on dydx the community can quite literally own the platform that they're trading on and that's a really powerful thing uh already we've seen just a ton of activity on dydx governance on the forums driving a lot of engagement to the platform and i think once users feel like they're owners of the platform that they're trading on they're much more likely to use that platform over just something that's you know wholly owned or you know mostly owned by an individual or small set of individuals i think that's really exciting as well so those are kind of the main reasons i'm excited about decentralized exchanges i also think once dydx gets to a point where it's just open source software running on the chain that's really powerful where

you know if you can just pull the dydx code and start trading that's something that's fundamentally different and you know doesn't exist in on any centralized platforms and that's really what we're going to be building towards over the next year but already have you know a huge step up in transparency security and community ownership and eventually you know call it like censorship resistance or full decentralization over what centralized exchanges can offer what's interesting to me about what you just said is this seems like a pragmatic approach you're trying to be the biggest exchange in the world and you actually think decentralization is the way to get there yeah exactly and not to take anything away from like anyone else who's just sort of like you know fully hyped on like decentralization for more ideological

reasons i'm a big proponent of it too obviously but like where i'm coming from is i want to build this biggest exchange like how do we do that decentralization is literally i think like how we do that um and there are you know multiple different reasons why people could be excited about building protocols and startups but for us it really is as you say like a pragmatic approach there are a lot of builders in this space who have similar like lofty ambitions and just aspirational goals yet they choose to route around decentralization because they want to get to those goals you know in this the next quarter or in two quarters rather than in two years or four years so it's always very refreshing to see someone take the decentralization

as a product first approach while also thinking in the long term right for thinking in long term gains so it's also it's always very refreshing to hear that and on the same time on the same in the same conversation bankless listeners will if they've been paying attention they will know that decentralization is a spectrum and there is an actual centralized company that is part of the overall dui dx ecosystem and i don't know if this is true but i've heard murmurings about this and i want to verify this with you antonio is there a differential in power between the what the token governs over and the company behind dydx is there a discrepancy there or is that is that a rumor where are there any differences in what has power

over what when it comes to the dydx system yeah good question there definitely are differences uh right now um at a high level the the token and therefore token governance has control over all of the dydx smart contracts so has full admin control over the smart contracts has control over how they can be upgraded uh for example like what assets can be added to the exchange what the like risk parameters are all these different things like important people are not a multi-sig right this isn't some off-chain agreement saying hey there's these multi-sig owners they will answer to the token holders that's not what you're saying you're saying that the token holders actually have admin control over the smart contracts that's correct yeah and we totally

burned are like admin keys and everything like that um so only the token holders have control over the protocol now which i think is really exciting you know we're not the first to do that sure but i think we've seen that work really well with other projects like compound ave uniswap to name a few and we're excited to bring that to uidx as well in terms of what the company controls the company controls the order book and sort of order matching that happens in an off-chain way right now it controls the revenue that's generated through trading fees on dydx um and then the the actual product and sort of user interface as well um though i will say over time we do plan to decentralize a lot of those pieces um as

well outside of the revenue piece um you know we just plan to decentralize the order book and the order matching plan to decentralize and open source the product and really get to this point that i touched on before where eventually dydx will just be open source code that's out there running on the chain sort of like a unislop or like that level of decentralization that's really what we're building towards and we're really serious about this on you know specifically like a 15 to 16 month timeline and that's something we're actively working on and researching right now so you said the centralized company is getting the trading fees is that just 100 binary is in the token and the tokens that the token doesn't get any of the trading fees and all the trading fees go to the centralized company that's correct yeah and then

is there a long-term roadmap for for that to have any changes or is that just going to be the way that it is that's just the way that it is yeah okay um and then uh with regards to the the the um order the order books that's something that's operated by the centralized company is that more of like a just a technical property or is that something that like is is there a road map for decentralizing that as well yeah there's a road map for decentralizing that as well and that's sort of what i was touching on that we're actively researching right now like how can we build a fully decentralized version of bydx um historically we've kept the order book in order matching in a more centralized way

just due to performance and sort of technical considerations but i honestly think that the with you know the the rapid innovation that we've been seeing in other layer ones and other ethereum layer twos and you know eth2 itself that it is achievable for us to build a great product on dydx that's order book based and fully decentralized on sort of like an 18 month timeline and tony antonio yeah thanks david anyways [Laughter] you guys have been like one of the most successful uh pioneers on layer two right there's a there's a lot of uh protocols and um like different projects building on layer two but you guys have like

crushed it in terms of volume and uh you also kind of pioneered this space too deciding to like you know pivot to layer two relatively early i'm i'm i'm just curious like how hard was it is it still really difficult to build on layer twos what advice do you have for uh people and just give us an update on layer two from a builder's perspective and somebody's actually brought a successful product to market here yeah so i guess a bit of context on which layer two we're building on and how long it took us and stuff like that we're partnered with starkware which is the leader in this really exciting new scalability technology called zero

knowledge roll-ups and we started building with them in i believe july or august of last year and then built for about six months or so and launched our layer two product i think like february of this year um so you know it was a challenging build to start and i think that's okay like uidx one of the things we also pride ourselves on is that we have and i strongly believe that's just one of the best engineering teams in the space however what i would say about layer twos in general both on starkware and you know with other exciting competitors like optimism or arbitrarium is i think the developer experience is quite rapidly getting a lot better and it's a lot easier to build on them now and i think that's one

thing that a lot of people in the space are excited about um you know now dydx really has a lot of other people that that are also building on on layer twos whether they're dexes whether they're nft platforms um or other things and i think just the improvement in developer experience has gone a long way towards enabling other projects to build on layer two as well are you bullish on zk roll ups and like yeah yeah definitely yeah i definitely am super bullish on zk roll ups um for a couple reasons i think they're just fundamentally more scalable by a lot than optimistic roll-ups are um and they're also and most people don't appreciate this just way more production-ready than optimistic roll-ups are i mean

empirically like uidx is literally doing two billion dollars a day of volume on zero knowledge roll ups right now and i think like you know not the thrift shade at anything but just like looking at the state of the world right now like unislop on optimism i think is doing like tens of millions of dollars a day at least last i saw in volume maybe more now um but i think that just zero knowledge roll-ups are really production ready they have lower withdrawal times um so that's a lot of the reasons why we've been championing championing them in a big way um and why i'm excited about them in the future as well it's kind of great though like if you have a you know if if you're doing something that's app specific and you don't need a lot of composability i would say right from

other chains right right at least zk roll ups without an evm you know in their current form i guess maybe evm compatible zk roll ups um might totally change the game there but like um refresh me i'm looking here on layer two beat and i think this is a great assessment i recently they they added a whole risk section antonio to their like um list of of layer two projects and on dydx if the sequencer fails um you can still exit to layer one right and if there's a validator failure there's also an escape hatch right this is kind of what zk roll ups provide and that like you never have to give dydx full custody of your funds if

the company shuts down or something super bad happens you always have the ability to exit back to layer one um i don't know if there's really a question there it's just like a realization that like yeah maybe i'm more curious in sort of your your strategic thoughts here so this has been almost a um an alt layer one summer if you will in that like a whole bunch of alternative non-ethereum layer ones like solana's and avalanches have really taken off in terms of market cap and token price appreciation what what's your take on that versus a rollup centric view of the world where it's going to be ethereum and then a whole bunch of

different roll-ups some evms some app-specific roll-ups what what do you think wins in the end stuff to say and i think that one of the things that's also proven correct over the past year is that there's going to be a lot of different scalability solutions that will all have market share in my opinion now is that you know different chains or different scalability solutions will make sense for different applications like for example you touched on this before but we at dydx care relatively a little bit less about composability and therefore like zero knowledge roll-ups made more sense for us though i will also say as an asterisk as your knowledge roll-ups are improving a lot on composability too um with starkware's launch of their

stark net which is sort of like a shared chain for all of the things building on starkwear but outside of that you know some projects may care more about scalability you know raw scalability some may care more about finality some may care more about um you know nation state uh censorship resistance stuff like that and i think just different chains have different trade-offs like all technology does so i don't think there's going to be so much of one winner so with that backdrop um i still obviously am super bullish and super excited on layer twos rolling back up to ethereum empirically that's working really well right now you know dydx is processing hundreds of thousands of trades per day which i think is a very impressive level

of scalability we are of course tracking other things that are going on in the space like solana like cosmos near all that kind of stuff again i'm pragmatic i'm going to do and going to build on whatever chain i think gives dydx the best chance of success and i have you know no particular allegiance to ethereum which you know maybe heath maxey's will play me for but also hopefully ethmaxis actually like me because i am pragmatic and i am saying and thinking and literally you know putting my money in business on the fact right now that ethereum is i think the best possible platform you know ethereum plus like a layer 2 roll up is the best possible platform for dydx to be built on right now and i think there's still a lot more to do on you know the tech side with

ethereum with eth2 you know layer twos and starkware and optimistic rollups are getting better all the time so i'm really excited about that tracking other things that are going on in the space but still you know big proponents of ethereum and layer two for now definitely the latter is what we like where you are trying to do whatever's best for dydx for your baby for your company and you've chosen to align with all the bankless values that ryan and i um preach about on on this program so it's very very validating from from our side of things david did you just admit that you're an ethnoxy you know i mean implicitly i sir i am the recipient of that label and so at some point i'll just stop rsr

stop arguing with it um but i do not bestow it upon myself and there's a differentiator there um antonio out of the dydx account yesterday uh tweeted out um on november 1st spot and margin trading on the dydx layer one will enter close only mode i think this is implying that dui dx on main chain ethereum is coming to an end what is the long term relationship with the ethereum layer 1 and dydx that's correct um effectively the the layer one platform is being shut down just to kind of give a bit more context and color there um yesterday i think we had like 200 000 trades on layer two and we had 40 on layer one so really like almost all of the volume and all of the

activity has already transferred over to layer two um and that's sort of the reason why it's being shut down um it just you know is as i've been saying like an inferior product experience and we don't want the dydx brands or you know user experience to to suffer and not be up to the standards of all that we have to offer at dydx and that's really what informed the decision to shut it down and also one of the important things in startups and protocols in general is focus and i you know not to throw too much hey but i think a lot of people in crypto like lose sight of that to be honest a lot of times um where like you know again like let's just start with like the the high level goal of wanting to be the biggest company or exchange or whatever in

crypto um well the way i think we do that is just taking like the biggest thing biggest marketing crypto derivatives and focusing on that and going really hard after it you know not trying to do like too many like other things you know eventually probably dydx will scale you know with our team and our head count to the point where we can build great high quality products for all types of different things but uidx's team right now is 20 people with nine engineers so it just makes sense for us to focus on the highest value product and we see that as our perpetuals on layer two product do you think that this is kind of a canary in the coal mine for apps on layer one do you think that this is kind of perhaps a learning lesson for for builders that maybe the l1 might not be the best place of

their energies and of their labor and maybe they should focus only on on layer two do you have an opinion on that matter i definitely do think that it makes a lot more sense to focus on layer two for now um i still do think it's likely harder to build things on layer two so like i said it's getting better all the time um so i don't know if i were like starting a startup in the space right now just trying to brainstorm about where i might start i may still start based on what i was doing on ethereum layer one and then try to like port it to layer two once i sort of like reached a certain level of scalability um but i think it really is on sort of a case-by-case basis both on you know the technical quality of the team um the

amount of scalability that they need like what solution may make the most sense for them i think this is just an example of like you know shutting down the manhattan office and like moving somewhere to the suburbs right where the quality of life is better and yeah everything's cheaper so yeah it's kind of cool that you guys have have migrated there i want to ask a question about kind of regulatory so i you know um we have a lot of u.s listeners right now and listeners that are you know frankly frustrated that they can't actually trade perpetuals products on dydx right they didn't receive the dydx token airdrop and i know that's not your fault or dydx's fault but can you give us a sense for

um why that's the case like what are the reasons that u.s listeners are are barred from this when when we had uh see former cftc commissioner brian quintens on the program you know i made the comments to them like sometimes it feels like we live in a financial prison if we're living in the u.s like there's all sorts of these things in crypto that we can't access and i asked him why you know his response was well it shouldn't be like that right and then he told us to like build faster it's really cool response um but like what's your take why is it like that why can't u.s consumers and users trade on dui dx why didn't we get it an airdrop

yeah so first of all i feel you like it definitely is frustrating um you know that dydx can't be offered you know both the dydx token and the dydx exchange can't be offered anywhere in the world but what i would say um is that compliance is very important to us at dydx not to go into too too much detail but the the us and specifically the cftc has a lot of restrictions about what types of derivative products can or cannot be traded on you know on any asset um and on what type of platforms and what sort of licenses that you need to be able to offer these products um and again not to get into too too many details but these licenses are ridiculously hard to acquire they're

sort of like you know four to five year processes um and then you know even if you acquire these licenses you can't just offer any type of derivative products that you may want to do um so you know there is you know for us as a business either no path or the path is too hard to offer these types of products to customers in the u.s i know that's frustrating i definitely understand everyone's frustration but first and foremost it's important for us to be compliant because we are a company that's operating and then second of all on sort of the the more token piece like why was the dydx token not distributed to us customers i think for two reasons um first of all uh we just wanted the

holders of dydx to be users of dydx um and again i just touched on this before but like you know the way it is right now empirically is that dydx users are not us users um and therefore like it makes the most sense for just you know the token not to be distributed to u.s people because they can't be users of the product and that sucks and you know we'll champion like better regulation for the space and all that long term um as much as we can and definitely agree with you know the you know brian's the cftc commissioner's remarks um before and you know we'll work on that for the long term sort of from like a regulatory uh

advocacy perspective um but given that it just didn't really make sense for us to distribute the tokens in the u.s and then the other thing i'll say just to finish up is in addition to a lot of issues around derivatives in the u.s there's also um as i'm sure everyone's heard a lot about especially recently a lot of pressure uh from securities laws perspectives uh in the us with the sec around launching a token um and it just made sense for us from like a risk-adjusted you know business perspective uh given that our users aren't in the us anyways to just not distribute the tokens to u.s people and sort of be done with it you don't have to comment on this next bit but i just want to say this is a

damn shame and like i'm just wondering if anybody in washington is going to wake up and realize that a 20-person team nine of which are engineers based in the u.s with us-based talent can't actually serve u.s citizens on a trajectory maybe to become the largest crypto exchange in the world but can't serve its own citizens it's absolutely ludicrous to me don't need a comment from you on that antonio but um i hope washington wakes up and actually realizes what's at stake here we have that in the u.s we have the talent to become the leading jurisdiction in crypto and defy we just need regulator support to help us do

that i don't know who i'm talking to there david why don't you take the next question all other regulators that listen to the bankless podcast is who you're talking to there are some there are there are enough there are enough right yeah um antonio as you come down to the end of this interview and thank you so much for your time uh dydx in three five ten years what's the maximally successful version of dydx what does that look like and it please include in your answer perhaps a mobile app yes yes um so on the mobile app piece like we're actually building that right now it should probably go live in like three to six months um just as a short aside i think like nobody has nailed mobile trading experience uh in

crypto yet even centralized exchanges you know people use like ftx's and finances app but they're nowhere near as good as like a robin hood and i think that's what we have the opportunity to create um with the dydx mobile app so i'm super excited about that you know i think coinbase's app is great but it's not really for trading it's like for like buying and holding bitcoin which is great like people should do that too but we want to nail like the mobile trading experience so excited about the app to be a big component of that um but have touched on this a lot throughout the show and i i think hopefully i've hammered this point home by now but we really just want to be one of the biggest exchanges in crypto and i think we have a real shot to go out there and do that on you know sort of a

five-year time horizon um already seeing just massive growth for decentralized exchanges you know first with uniswap now with uidx over the past year and i think that should really excite people and should really at least open people's eyes to that there's something real going on here in decentralized exchanges right now even if you don't understand it just look at the numbers empirically they're growing a ton and i think it's worth people you know at least taking notice um and you know giving credence to the idea that there is something really valuable here um for the long term or at least likely that there is we talked about like what the we think these things are transparency you know security uh censorship resistance community ownership um and i think those are the things that once we

get to a point where the products um on on d5 are on par or superior to what can be offered on centralized exchanges and i think we're really close to that at uidx um you know i think a lot of these like second order benefits of decentralized exchanges all the stuff i just touched on will start to shine through and that will really drive just a huge amount of growth um to d5 in the long term and like i said we're pragmatic i just want to build the best you know the biggest exchange in crypto that's sort of like my thing and i think the best way we do that is with the ydx um and with decentralization is there any um conversation to be had about fiat on ramps to dydx in the future it's a reasonable question um i sort of

think that they're actually not that necessary or at least call it theirs like they're two different products like the fiat on ramp doesn't necessarily need to be coupled um with the exchange people actually trade crypto on and i think we've empirically seen that happen over the past few years with coinbase and you know a few others really dominating the fiat on and off ramps in the space um but then just honestly getting blown out of the water on their trading volumes by platforms like ftx and finance which sure have like some fiat on-ramps but for the most part people are just trading crypto to crypto on those exchanges so i think just empirically we found over the past couple years that there is a massive business model at least with just cryptid of crypto trading and that's what we're focused on

yeah what's funny is once you cross that bridge to crypto you don't tend to leave right stay in crypto and your your value and your assets remain there uh antonio it's been an absolute pleasure to have you maybe give a shout out to this because this seems super interesting you guys are actually hosting a trading competition is that correct what what is that about that's correct yeah just hosting a regular old trading competition a lot of exchanges do them but um you know can win as you see here on the screen up to 250k in uidx prizes and then we'll uh continue to uh operate these over time and those are paid out in usdc not in the dydx token but yeah so how do you win what are we competing for like um oh just make the most money on dydx just competing based

off of your pnl for a week and whoever can make the most money on dydx and flex on everyone else there you go bankless listeners that is not me i am not a trader but some of you out there are and uh you can win this competition 250k and remember if you do sign up for this competition remember to use the bankless referral code which is in the youtube comments as well as the uh podcast show notes as well that's right might as well save 10 on your trading fees when you do that antonio thank you so much for joining us congrats on the success we look forward to seeing what new things dydx builds in the future it's been a pleasure to have you yeah thanks so much for having me and great conversation appreciate it guys risks and disclaimers of course

defy is risky all of crypto is risky if you're trading eth or bitcoin you know that's risky as well you could definitely lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our daily newsletter podcast and community as a bankless premium subscriber to get the most out of your bank list experience you'll get access to our market analysis our alpha leaks and exclusive content and even the bankless

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