Andreessen, Coinbase funding dYdX to launch ‘short Ethereum’ token
dYdX has a plan to shortly launch ‘short Ethereum tokens’ that is being funded by the prominent organisations like Coinbase and Andreessen. In just two months’ time, dYdX a start-up dealing with decentralised financial derivatives will implement the plan of shortening crypto market. In this context, the traders of Ethereum will get exposed to a new venture for diversifying their experiences.
Andreessen Horowitz based in America and Polychain, two venture capitalist firms have been leading the seed round. The seed round which raised a fund of $2million has been recently closed by dYdX. These prominent venture capitals have been accompanied by Brain Armstrong, Coinbase CEO, Fred Ehrsam, Coinbase co-founder, plus angels of Kindred and Abstract along with Elad Gil, serial investor.
The statement of dYdX founder
Antonio Juliano, the founder of dYdX has commented, “The main use for cryptocurrency so far has been trading and speculation — buying and holding. That’s not how sophisticated financial institutions trade.” As per the report of Techcrunch, he has further stated, “The derivatives market is usually an order of magnitude bigger than the spot trading or buy/sell market. The cryptocurrency market is probably on the order of $5 billion to $10 billion in volume, so you’d expect the derivatives market would be 10X bigger. I think there’s a really big opportunity there.”
The decentralised financial derivative start-up proposes a short Ethereum token whose value is inversely secured to the price of the digital currency. In the crypto market space, when the valuation of Ethereum [ETH] falls, the price of the token increases. And in contrast, when the Ethreum [ETH] valuation surges, the token price depreciates.
The plan includes the offering of leveraged and short tokens in future times for ERC20 currency. According to Juliano, partnership with exchanges are also established for providing margin tokens “where people are already trading.”
In his words, “We think of it as more than just shorting your favourite shitcoin. We think of them as mature financial products.” Juliano has developed dYdX for creating protocol for providing margin tokens. Juliano has stated, “It’s a race to build liquidity faster than anyone else.” The time left for the launch is nearly two months which is, indeed, crucial for developing measures to provide protection to the protocol from attacks. The security offered by decentralisation is one of the selling points of dYdX.
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