Big Guns Back $10M Investment in DeFi's dYdX

The funding round, led by Three Arrows and DeFiance Capital, was also joined by Andreessen Horowitz and Polychain Capital.

Jan 26, 2021 at 3:00 p.m. UTC
Updated Sep 14, 2021 at 11:01 a.m. UTC

Trading venue dYdX has raised $10 million in a Series B funding round led by Three Arrows Capital and DeFiance Capital.

The platform, launched in 2017, offers a spread of decentralized trading products including both bitcoin and ether derivatives. The San Francisco-based startup plans to use the funds to increase its product offering, further decentralize its platform and increase its presence in China, according to a blog post shared in advance with CoinDesk.

"dYdX was the first [decentralized finance] app I ever used and I am elated to have the chance to invest in [it] today,” Three Arrows Capital co-founder Su Zhu said in a statement.

Three Arrows was joined by a lengthy roster of crypto investors in the Series B, including Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group and RockTree Capital. The round was also joined by previous Series A investors Andreessen Horowitz and Polychain Capital.

The trading platform has had a gangbusters year with trading volumes across spot, margin and perpetual contracts jumping fortyfold – from $63 million in 2019 to $2.5 billion in 2020, the firm said.

Margin and spot trading made up the lion’s share of that activity clocking in at $1.9 billion for the year. The startup released its BTC and ETH perpetual products – which operate similarly to a futures contract but without a set expiry date – in May and August 2020, respectively. 

Monthly volumes by dYdX product type

Gunning for growth

To date, dYdX’s impressive growth has been overshadowed by other DeFi products such as Compound Finance and Uniswap. 

Indeed, DeFi Pulse ranks dYdX as the 18th-largest DeFi market by total volume locked (TVL) at $150 million.

In a bid to climb the DeFi rankings, dYdX is introducing rollups, a technology designed to increase throughput and reduce gas fees. High gas fees on Ethereum have hamstrung young DeFi markets in recent months.

The dYdX solution involves a product based on StarkWare’s Cairo software and is expected to be rolled out in February.

"Our goal is to become one of the largest crypto exchanges – period. To accomplish this we’re building a Layer 2 system with StarkWare enabling cross-margined perpetuals, allowing for significant improvements to trading at scale,” dYdX founder Antonio Juliano told CoinDesk in a Telegram message.

Correction (Jan. 26, 15:44 UTC): Coinbase co-founder Fred Ehrsam participated in the prior series, not the Series B.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
First Mover Americas: May Brings Showers Not Flowers as Bitcoin Languishes in Terra Aftermath

The latest moves in crypto markets in context for May 16, 2022.

The latest moves in crypto markets in context for May 16, 2022.

2
Bitcoin Miner Bitfarms Lowers Hashrate Outlook to 6 EH/s This Year

The miner is still assessing other opportunities to expand its capacity to as much as 8 EH/s by the end of the year.

The miner is still assessing other opportunities to expand its capacity to as much as 8 EH/s by the end of the year.

3
Voyager Digital Raises $60M in Private Placement Led by Alameda

The new funds will take the trading platform's liquidity to more than $225 million.

The new funds will take the trading platform's liquidity to more than $225 million.

4
Fantom Stablecoin DEI Becomes Latest to Lose Dollar Peg

DEI lost as much as 46 cents in European hours this morning. It follows a trend of several algorithmic stablecoins losing their pegs.

DEI lost as much as 46 cents in European hours this morning. It follows a trend of several algorithmic stablecoins losing their pegs.