• Anchorage Digital introduces the Ethereum DeFi Token dYdX

  • Anchorage Digital announced today that it will be able to take custody of the dYdX governance token on behalf of customers as soon as the token is available.

    Anchorage already supports 57 digital assets, including stablecoins like USDC, market capitalization leaders like Bitcoin and Ethereum, and decentralized finance (DeFi) governance tokens like Compound.

    dYdX belongs to the third category, as one of many Ethereum-based protocols for lending, borrowing, and/or trading without the use of financial intermediaries. The company created dYdX the exchange to allow customers to make high-leverage trades; traders can access up to 25 times the amount of collateral they put down. According to DeFi Pulse data, it is the third-largest platform for derivatives trading on Ethereum, with more than $300 million in assets on the platform.

    However, the company wishes to further decentralize the decentralized exchange. To do so, it will require a governance token, which will allow users to vote on protocol changes as well as market structure changes. On August 3, the company formally introduced the dYdX Foundation, which will issue the tokens. The DYDX token will be forked from Aave’s own governance token in the DeFi protocol and will run on the Ethereum network.

    Anchorage’s acquisition of the asset demonstrates a growing desire among institutional investors, to whom it caters, to participate in DeFi governance without having to manage their own tokens. In addition to asset custody, it provides governance services for tokens such as AAVE and SUSHI. The service is marketed as “on-chain participation with offline assets.”

    The addition also indicates that Anchorage intends to expand its core business after receiving approval to become the first federally chartered digital asset bank in January. Anchorage Digital Bank will be able to avoid state-by-state regulations by forming sub-custody arrangements with traditional banks, such as the recently announced partnership to provide Ethereum-backed loans to BankProv customers, thanks to the license.

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