dYdX introduces isolated markets and isolated margins.
Decentralized trading platform dYdX plans to launch isolated markets and isolated margins. This upgrade is part of the upcoming release 5.0 of the dYdX Trading v4 open source software suite and is expected to take effect in the coming weeks.
Advantages of Isolated Markets
Isolated markets have separate collateral pools and self-insured funds, unlike current cross-margin markets. This arrangement allows each market to have unique risk properties, allowing the protocol to safely support a wider range of market types.
The introduction of isolated markets will significantly expand the number of markets available on dYdX. The new Markets widget for sourcing markets from v4-web currently lists approximately 20 markets. With the emergence of isolated markets, this figure is expected to soar to over 800 potential markets.
expanded market world
Markets eligible for listing through the new Markets widget include those available on at least two centralized exchanges or at least one decentralized exchange, subject to certain liquidity and market capitalization guidelines. The methodology for the new world of market widgets is open sourced at docs.dydx.exchange.
This release also sees the ability to query prices directly from dYdX Chain’s decentralized exchange for the first time. Initial protocol validators will be able to query Raydium, which will eventually enable the Raydium marketplace to be listed on dYdX.
Role of Isolated Margin
Isolated margin makes trading easier by allowing traders to trade any market with isolated positions. You can limit collateral to specific positions and manually adjust collateral to suit those positions. This flexibility gives users greater control and understanding of collateral management.
All isolated markets must be traded with isolated margin, but markets for which cross margin is applied in the protocol can be traded with user cross or isolated margin through the UI.
Add new market
The process for adding new markets will remain the same as it is today, with governance. Ultimately, adding new markets to the dYdX Chain is completely permissionless and markets can be listed immediately without any governance process.
Image source: Shutterstock
. . .
tag