This week, DDEX released an updated version of their exchange that includes 5x margin and stop limit orders. Because of the additions, DDEX has more trading features than any major decentralized margin platform.
DyDx and Fulcrum are arguably the two most well known margin platforms in the DEX world. What now puts DDEX ahead of them is the ability to use a stop loss and limit order. DyDx allows limit orders on certain pairs, but no stop loss and Fulcrum only allows market orders.
Right now, there are no fees to trade on DDEX, but in the future it looks like there might be .1% taken per transaction. DyDx beats them in this area with no fees whatsoever. BitMex charges .075% for market orders, which is not a significant difference, but still notable.
DDEX is built off of the Hydro protocol which allows centralized platforms to bridge liquidity into the DEX marketplace. Liquidity has always been an issue for DEX trading, especially using leverage. Unfortunately, there is no slippage calculator included on the platform.
Why it matters
The bottom line is stop losses and limit orders are essential features of an exchange that keeps speculative traders from embracing DEX. Leverage on the exchange is still way lower than centralized competition, but respectable in general. In order to use that high of leverage in the U.S. stock market, an account has to qualify for portfolio margin.
Some margin DEX creators have been looking to appeal to market makers who don’t need these types of features. After selling positions to takers, they can use what the capitol that is left to hedge risk using leverage. Their entry is more dependent on when the takers purchased from them than an ideal price.
Decentralized Exchanges haven’t been able to fulfill market makers needs because of the lack of liquidity. Retail traders typically trade with less volume, so finding out how to take them away from centralized exchanges could help DEX’s appeal in the long run.
Scott Winges, Director at DDEX clarified to us on Reddit that the fee may not be .1%.
“We may or may not ever implement the 0.1% trading fee mentioned in the article. The reason we have it designed with the fee crossed out is that our legacy ddex used that trading fee, so we wanted old users to be very aware that there is NO fee now.”