How to Deposit on dYdX?

What is dYdX?

dYdX is a DEX (decentralized exchange) that is currently built on top of the Layer 2 Ethereum-based system known as StarkWare. It uses the ZK (zero-knowledge) proofs of StarkWare to generate a platform that is more decentralized, secure, and focused on delivering privacy.

It was in June 2022 that the exchange made the announcement that it planned on leaving the Ethereum blockchain, effectively replacing its existing StarkWare-based platform with its very own, which will be based on the Cosmos blockchain. 

In addition, its founder said that this shift to another ecosystem will help deliver a much better experience for its users via customizable fee structures and much more. Not only that, but the dYdX chain features an off-chain, decentralized orderbook that will be able to handle scaling along with the continued growth of the platform.

While dYdX provides a decentralized exchange that is similar to SushiSwap or Uniswap, for instance, it was designed for the trading of a specific kind of asset, which is perpetuals. Also known as perpetual swap trading contracts, perpetuals are financial instruments, or derivatives, that derive their value from various underlying assets.

Like options or futures, they offer opportunities for speculation, which involves traders speculating on how the value of a certain asset may turn out in the future. However, unlike options or futures, perpetual swaps don’t come with expiration dates, which is what gives their contracts their “perpetual” nature.

And although dYdX’s trading style may be a bit niche, its acceptance by retail and institutional traders has placed it among the more well-known exchanges within the cryptocurrency market. And as of this moment, the TVL (total value locked) for dYdX is around $344 million, according to the data collected by Messari.

This article will therefore cover how you can deposit some funds into your account here, which you will need for trading.

How to Deposit on dYdX? (Crypto)

Before you deposit some funds, however, you will obviously need to create an account on the exchange, which mainly boils down to linking your wallet and verifying its ownership. A bit different when compared to other exchanges, but perhaps it’s because it’s non-custodial, decentralized, and not regulated. Still, if you have done that already, you can immediately begin its deposit process, which we will cover below.

Step 1. Visit Website

You can start the deposit process by heading over to its official website and clicking on the “Portfolio” tab. On the portfolio page, click the “Deposit” button, which you will find on the bottom left.

Step 2. Enter Amount

Once you have clicked the “Deposit” button, a small window will pop up where you can enter the number of tokens you would like to buy. For this guide, however, we will use USDC as an example.

Step 3. Click “Enable USDC”

Once you have added the number of tokens you want to purchase, you will need to click on “Enable USDC” if this is your first time depositing on dYdX, which incurs a gas fee, or enabling fee, for that matter.

The cost of the gas or enabling fee will depend on how busy the Ethereum blockchain is when you are making the deposit. Also, you will only need to carry this out once, and the same will therefore be true for the enabling fee as well, i.e., it will only ever be charged once here, which may take a couple of minutes to fully process.

Step 4. “Confirm Deposit”

So, once your enabling fee has been fully processed, you can confirm your deposit, which will also incur some gas fees. But after this, your trades on this exchange will not require any additional gas fees. 

Step 5. Await Confirmation

Your deposit, however, like the enabling fee, will take some time to process. But once it has been processed, the funds will be delivered to your account, and you can begin trading on this platform.

How to Deposit Using Fiat on dYdX?

If, by any chance, you want to buy some USDC without incurring any gas fees and waiting for your transactions that take a while to be processed, you can use the fiat option to buy it directly, which we will discuss below.

Step 1. Click “Deposit”

On the portfolio page, click the “Deposit” option again, which will be followed by a window popping up.

Step 2. Select “Buy Now”

On the window, you will see a heading known as “Deposit with Fiat.” Click the “Buy Now” option beneath that heading.

Step 3. “Acknowledge Terms”

Here, simply enter the amount of USDC you would like to purchase and click the “Acknowledge Terms” button below to continue onward.

Step 4. Click “Buy USDC”

Once you have reviewed all of the terms, click the “Buy USDC” button, which will be followed by a different screen where you can choose the method of transfer you’d like to employ and enter your personal information, like your email address and card details, among other things. 

After all that is done, your deposit will be completed, and while there are no gas fees, you may still incur some third-party service fees when you are using this method.

FAQs