The crypto market is steadily maturing, expanding the possibilities for investors. Good news for the growth of crypto-verse because the more options there are, the more people can consider it an attractive investment option.
Within the group of initiatives that have dared to take a step forward in the creation of new market strategies, one of which is worth mentioning is dYdX. For those with some knowledge of mathematics, the name of this startup comes from the concept of derivatives, an intelligent choice by the team, given that they focus on financial derivatives trading.
One of the points that make dYdX stand out is that they offer a trading option that is so far unusual for the markets. The team behind this platform have created a token which variation is inversely proportional to that of Ethereum.
Short Ethereum Token: Diversify Risks With New Investment Options
As explained by Tech Crunch , the idea of the token is risk diversification, allowing traders to short the token by making profits if they correctly predict a bearish streak in the prices of Ether (ETH):
“The idea is that you buy the short Ethereum token with ETH or a stable coin from an exchange or dYdX. The short Ethereum’s token price is inversely pegged to ETH, so it goes up in value when ETH goes down and vice versa. You can then sell the short Ethereum token for a profit if you correctly predicted an ETH price drop.”
Mr. Antonio Juliano, CEO of dYdX, comments that beyond being a speculative tool, the company expects to be able to offer financial products of proven quality and solidity:
“We think of it as more than just shorting your favorite shitcoin. We think of them as mature financial products.”
dYdX allows traders to execute derivatives operations under the security of a decentralized platform based on the 0x protocol. This is a crucial difference from other options that require traders to deposit funds under the control of third parties, exposing their money to hacking or uncontrolled errors.
Mr. Juliano commented that he is confident not only in the success of the Short Ethereum Token offer but also in the dYdX platform in general:
“We plan to capture value at the protocol level in the future likely through a value-adding token … It would’ve been easy for us to rush into adding a questionable token as we’ve seen many other protocols do; however, we believe it’s worth thinking deeply about the best way to integrate a token in our ecosystem in a way that creates rather than destroys value for end users.”
dYdX: A Serious Business With Lots of Potential
Likewise, the startup has raised high expectations in several firms that have been involved in its financing rounds. Polychain partner Olaf Carlson-Wee said about it;
“Antonio and his team are among the top engineers in the crypto ecosystem building a novel software system for peer-to-peer financial contracts. We believe this will be immensely valuable and used by millions of people … I am not concerned with short-term revenue models but rather the opportunity to permanently improve global financial markets.”