Interview With dYdX Foundation’s VP of Strategy, David Gogel
In the world of cryptocurrencies, centralized exchanges have been facing issues ranging from mismanagement and opacity to regulatory attacks. As a result, more and more crypto users are now turning towards decentralized finance (DeFi) as a viable alternative.
DeFi allows users to trade on a peer-to-peer basis using transparent smart contract code. While DeFi has its own set of challenges, it continues to evolve and improve, offering a growing number of products that rival those found in traditional finance.
CryptoPotato recently had the opportunity to sit down with David Gogel, VP of Strategy and Operations at the dYdX Foundation. dYdX is one of the largest decentralized exchanges available today, known for its high trading volumes in perpetual swaps compared to other decentralized marketplaces.
Gogel sheds light on the exciting developments ahead for dYdX, how Wall Street traders are already utilizing the platform, and the most effective way to onboard new users into the DeFi ecosystem.
A Shift from Wall Street to Crypto
Gogel, who comes from a Wall Street background, has been a prominent figure in the crypto space for about seven years. In the interview, he shares his journey from traditional finance to leading growth at dYdX Trading and ultimately joining the dYdX Foundation.
As Gogel explains:
“I’m the VP of Strategy and Operations at dYdX Foundation. I’ve been with the foundation for about two years now. Our mission is to enable communities, developers, and decentralized governance over the current version of the protocol and future versions of the protocol.”
The Evolution of dYdX
dYdX has experienced significant growth since its inception, with peak volumes reaching $10 to $15 billion daily. Although recent volumes have declined, Gogel confidently states that net flows into the crypto market have seen an upward trend, with a noticeable shift from centralized exchanges to decentralized exchanges (DEXs).
Explaining dYdX’s dominance, Gogel says:
“Today, in the perpetuals volume landscape, we have a low single-digit market share, around one to two percent. However, we are by far the largest DEX. In the last 30 days alone, we facilitated close to $40 billion in volume, while the second player did maybe three or four billion in the same period.”
Transitioning Away from Ethereum to Cosmos
One intriguing topic discussed in the interview is dYdX’s ongoing transition from the Ethereum network to Cosmos. Gogel emphasizes the significance of Starkware’s L2 for settlement on the Ethereum network.
He also mentions that dYdX accounted for a majority of volumes on Starkware, acknowledging them as “great partners.”
Gogel further elaborates on the decision to move to Cosmos:
“The Cosmos ecosystem allowed us to build a custom chain specific to our use case, which revolves around high-velocity trading. Over the past year and a half, dYdX Trading has been developing the Cosmos open-source code. The key difference is that the order book and matching engine will run in memory by the validators, creating a highly scalable and decentralized system.”
Regulatory Challenges and User Experience
When asked about the impact of regulations on the growth of dYdX, Gogel acknowledges that while there has been an increase in users and volume due to clampdowns on regulated exchanges, the platform is better suited for advanced traders.
“The dYdX platform offers perpetual products, which are synthetic products that cater to more advanced trading strategies. It is primarily focused on the pro-retail or institutional segments of the market.”
“We Like Bear Markets”
Gogel highlights the potential for dYdX to attract a larger user base and the exciting opportunities that lie ahead. He mentions:
“Should the community choose to vote for version 4, our focus for the next 12 months will be on supporting the migration and building a thriving ecosystem around the dYdX chain.”
He concludes by stating that dYdX has shown resilience and innovation throughout different market cycles:
“dYdX has been a crypto OG. We thrive in bear markets, although bull markets are more fun. Our teams have been working diligently over the past two years, regardless of market conditions.”
And What About Crypto Mass Adoption?
Gogel reveals that dYdX has seen interest from advanced traders, including those from Wall Street. While the platform does not currently cater to users from the United States, it has attracted sophisticated trading firms who traditionally focused on traditional financial products.
“Many of these traders, if they trade in crypto, turn to perpetuals as a way to manage risk and hedge. Their familiarity with order book models makes dYdX a natural choice for integration. We have seen strong adoption so far, but there is still work to be done in attracting more users. Regulatory clarity in different markets worldwide would certainly help. However, technology moves forward exponentially.”
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