Chainlink oracles will power the dYdX perpetual contract product for the LINK/USD trading pair as we are reading in today’s chainlink news.
The DeFi protocol dYdX launched a new perpetual contract product for the LINK/USD pair which allows traders to gain get leverage exposure to the coin’s price movements. The perpetual contracts are related to the futures contract but there was no execution date and prices connected to the spot market rates. Now, the Chainlink oracles will power the dYdX perpetual contracts by securing more than $2 billion in user value. Crypto trading platform dYdX announced the new products today.
The new contracts will use LINK/USD prices from the LINK decentralized oracle network which provides the on-chain price data which cannot be manipulated. This is another vote of confidence for the asset which is integrated in DeFi applications which secure billions in combined user value. The perpetual contracts are related to futures contracts which mean traders exchange the obligation to purchase or to sell one asset at a predetermined time in the future. There’s also a difference as the futures contracts trade at prices different from the market ones and the perpetual contracts are usually trading close to the market price of the asset.
LINK-USD Perpetual Contract Market is live for trading. Traders can get up to 8x leverage on $LINK, with self-custody & decentralized settlement. To celebrate, we are giving traders for this market 50% off fees for the first 7 days of trading. Trade now: https://t.co/ELGbm2pLxv
— dYdX (@dydxprotocol) August 25, 2020
Perpetual contracts are traded continuously with no execution date which leads the buyers and sellers into treating them like an underlying asset while still enabling greater profits as a leveraged instrument. The LINK/USD perpetual contracts are generated with about 12.5% collateral so the traders that have a small amount of money can take bigger bets on the LINK price. If the prices rise, the can reap greater returns than just buying LINK on the market. on the other hand, if the price of LINK falls too much, the amount a trader used to enter the leveraged perpetual contract can end up liquidated which will leave them with nothing.
dYdX launched in 2018 and provides margin, spot, and perpetual contract trading on the platform. In addition to the LINK/USD offer, the exchange considers adding other pairs and is also working on adding StarkWare powered layer 2 scaling capability to enable speed trading on the platform despite the congestion of the Ethereum blockchain. Chainlink as noted in the chain link news is integrated into some of the most popular DeFi protocols such as Aave, Synthetix, and Kyber Network.
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