In brief
- dYdX has launched a new LINK/USD perpetual contract, allowing traders to gain leveraged exposure to LINK price movements.
- Perpetual contracts are related to futures contracts, but with no execution date and prices more closely connected to spot market rates.
- Chainlink now provides price data to DeFi protocols securing more than $2 billion in user value.
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Crypto trading platform dYdX announced today the introduction of LINK-USD perpetual contracts.
The new contracts will use LINK/USD prices from Chainlink’s decentralized oracle network, providing on-chain price data that’s designed to be manipulation-resistant. It’s another vote of confidence for Chainlink, which is now integrated into DeFi applications that secure billions in combined user value.
Perpetual contracts are related to futures contracts, whereby traders exchange the obligation to buy or sell a given asset like ETH—or in this case, LINK—at a predetermined time in the future. There’s a difference, though: Futures contracts often trade at prices meaningfully different from the market price when the contracts are created, whereas perpetual contracts typically trade close to the market price of the underlying asset.
As the name implies, perpetual contracts are traded continuously and without an execution date, leading buyers and sellers to treat them more like the underlying asset while enabling greater profits (and losses) as leveraged instruments.
The dYdX LINK/USD perpetual contracts are generated with a minimum of 12.5% collateral, meaning traders with a small amount of money can take much larger bets on LINK price movements. If the price rises, they stand to reap much greater returns than simply buying LINK on the open market. On the other hand, if the price of LINK falls too much, the full amount a trader used to enter the leveraged perpetual contract can be liquidated, leaving them with nothing.
dYdX launched in October 2018 and provides spot, margin, and now perpetual contract trading on the platform. In addition to LINK/USD, dYdX is in the process of adding other perpetual contract pairs and is working on adding StarkWare-powered Layer 2 scaling capabilities to enable rapid trading on the platform no matter how congested the Ethereum blockchain becomes.
Chainlink is now integrated into some of the most popular DeFi protocols, including Kyber Network, Aave, Synthetix, and more. Combined, the integration partners secure more than $2 billion in crypto value locked in DeFi platforms, powering the lending, borrowing, and trading services they provide.