BitcoinMacro

DYDX & PERP - Narrative and fundamentals

Long
BINANCE:DYDXUSDT   DYDX / TetherUS
All over the world we have regulators attacking crypto. Slowly, but surely... More and more exchanges having mandatory KYC , shutting down derivative products for certain countries, closing down registrations and trading for certain countries, as well as having issues maintaining and launching new products. China has essentially completed and finalized its crackdown, but US is coming next and will probably go after certain exchanges like Binance the same way they went after Bitmex (big fines and prison time).

Crypto is going against the state's interests and this was to be expected. That's why DeFi is so big and why decentralization really matters. Currently there are two major tokens related to 2 perpetual swap protocols which have been growing for some time. DYDX is the first one and launched its token fairly recently, while PERP is the other one and has been out there for some time. DYDX is at about 900M and PERP at about 800M, however DYDX is looking a lot better for many reasons.

First of all DYDX has a much cleaner chart and is a much younger coin. It's making new highs vs BTC and is near ATHs vs USD, while PERP is looking more heavy. Now for this there are some fundamental reasons as to why things look that way, and that's because DYDX just over the last week has had 11x higher revenue compared to PERP. DYDX also has a few more listings and is a bit more liquid, so currently either DYDX is undervalued or PERP overvalued.

In my opinion based on PERP's chart I think it could grow more and I don't think its valuation is that extreme. There is potential for both of them to grow as people might want to have a backup in case something happens to one of them. Both have had some major upgrades recently and have been doing pretty well, and in my opinion could continue to grow rapidly as Ethereum's scaling technologies could grow really fast as well. However the key takeaway here based on the current set of circumstances + the rapid growth + the relative valuations based on the current revenue, is that DYDX is undervalued and its price could appreciate a lot.

Finally I'd just like to point out that there are big risks for both of those. On chain derivatives trading isn't simple and we all know how easy it is for a DeFi protocol to get hacked... So be careful with the amount of money you put in either of those and remember that there are no certainties here.