- According to the data, decentralized derivative token dYdX has been one of the best performers in crypto trading in the past seven days.
- At the time of writing, the price dropped to $2.14, but this rise has recovered all the losses the asset has experienced since last week’s market crash.
- Demand for DYDX has been fueled by the hype surrounding the upcoming mainnet launch of the ecosystem’s independent blockchain, dYdX V4.
dYdX’s upcoming V4 mainnet launch has increased interest in DYDX token and triggered the upward movement; what’s next for DYDX?
DYDX Shows Impressive Performance in 1 Week
According to the data, decentralized derivative token dYdX has been one of the best performers in crypto trading in the past seven days. The majority of the growth came from the overnight surge on August 23, when the token rose to $2.19 with a 10% increase.
At the time of writing, the price dropped to $2.14, but this rise has recovered all the losses the asset has experienced since last week’s market crash. This rise in DYDX’s price was driven by experienced investors in the coin.
Nansen analyst Martin Lee stated in a statement shared with COINOTAG that the number of smart money wallets holding DYDX tokens has remained stable over the past two months, but these wallets have steadily increased their holdings.
The term “smart money” is generally used for experienced investors who have a proven track record in profitability and better understanding of the market compared to retail investors.
The analyst also noted an increase in withdrawals from exchanges in the past 30 days, which could imply that bullish traders are holding onto the tokens in anticipation of price increases.
What’s Behind the Rise?
Demand for DYDX has been fueled by the hype surrounding the upcoming mainnet launch of the ecosystem’s independent blockchain, dYdX V4. This chain, developed using the Cosmos framework, was in the instant testing phase at the time of writing.
The dYdX Foundation discussed the possibility of making DYDX the native L1 asset on the new chain. Therefore, the increasing accumulation was likely based on this expectation.
As a reminder, in the current V3 version, transactions are placed in an L2 (second layer) system, and zero-knowledge (ZK) proofs are regularly published to the underlying Ethereum layer. However, in the future, the network will not be dependent on an external blockchain or system.
The new network also aims to fill completely decentralized areas that the current system lacks. It was expected that all kinds of activities, from order book matching to facilitating transactions, would take place on the chain.
At the time of writing, dYdX was the largest perpetual futures trading protocol and recorded a trading volume of over $458 million in the past 24 hours, according to DeFiLlama data.
