How to Use dYdX: A Step-by-Step Guide to Trading Perpetuals

Introduction

dYdX is a decentralized exchange (DEX) built on Ethereum and powered by StarkWare’s Layer 2 technology. It specializes in perpetual futures trading, offering users leverage, low fees, and self-custody. This guide walks you through how to trade perpetuals on dYdX, while also exploring its spot and lending features.

Step-by-Step Guide to Trading Perpetuals on dYdX

1. Set Up a Wallet: Install a Web3 wallet like MetaMask or Coinbase Wallet. Ensure it’s funded with ETH or USDC.
2. Connect to dYdX: Visit trade.dydx.exchange and connect your wallet. Approve permissions to access Layer 2.
3. Deposit Funds: Transfer USDC or ETH to your dYdX account. This will be used as margin for trading.
4. Select a Market: Choose a perpetual pair (e.g., BTC-USD, ETH-USD) from the dashboard.
5. Place an Order: Use limit, market, or stop orders. Set your leverage and confirm the trade.
6. Manage Your Position: Monitor margin, funding rates, and unrealized PnL. Use stop-loss and take-profit tools.
7. Withdraw Funds: Close your position and withdraw assets back to your wallet when ready.

Spot Trading and Lending on dYdX

• Spot Trading: While dYdX focuses on perpetuals, users can swap assets via integrated bridges and external DEXs.
• Lending: dYdX previously supported lending pools, but now integrates margin trading directly into its perpetuals system. Users earn yield by providing liquidity or holding open positions.

Official Resources

• dYdX Beginner Guide
• Kryptium dYdX Tutorial
• Crypto Briefing: dYdX Perpetuals

FAQs About dYdX

• Q1: What is dYdX?
  A: dYdX is a decentralized exchange for trading perpetual futures with leverage, built on Ethereum and StarkWare Layer 2.
• Q2: How much leverage does dYdX offer?
  A: dYdX offers up to 20x leverage on major trading pairs like BTC-USD and ETH-USD.
• Q3: Is dYdX safe to use?
  A: Yes, it uses smart contracts and Layer 2 scaling for secure, low-cost trading with self-custody.
• Q4: Can I trade spot assets on dYdX?
  A: dYdX focuses on perpetuals, but users can bridge assets and swap externally for spot trading.
• Q5: What fees does dYdX charge?
  A: dYdX charges low trading fees and funding rates, with no gas fees on Layer 2 transactions.

Conclusion

dYdX is a powerful platform for decentralized perpetual futures trading. With its Layer 2 infrastructure, advanced order types, and leverage options, it offers traders speed, security, and control. Whether you're new to DeFi or a seasoned trader, dYdX provides the tools to navigate crypto markets with confidence.