Use Cases for DyDAI

Tejas Chitnis

Intro to DyDAI

Investing in DyDAI would mean investing in the USD currency as well as gaining interest using the DyDx platform. Theoretically, the value of this coin would only increase.

The DyDx platform allows users to place margin trading orders. In order to go long on Ether or BTC using leverage, the traders must borrow DAI from the others in the system to buy more Ether or Bitcoin. We as lenders can then make a profit for the interest paid by the borrowers.

Click here to check out previous article on how DyDAI works.

Gas Pricing

One of the major use cases for DyDAI is to avoid paying the withdraw and deposit gas fees every time you want to change your DAI position.

Every deposit and withdrawal costs more 400,000 gas, which is about $0.84(at a rate of 10), than using DyDAI to hold your DAI in DyDX position.

When chasing the highest interest rate this becomes a great cost.

Set protocol

Set protocol allows you to create a basket of tokens with your own rebalancing rules.

  • DyDAI can be included in sets that use DAI to hedge when the sets rules detect a fall in a cryptocurrency.
  • DyDAI can be added to a set which involves all yield tokens and has rules set to chase the highest interest rate. For example, a set containing cDAI, aDAI, CHAI, and DyDAI can be made.


Uniswap is a decentralized exchange that eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for fast, efficient trading. Uniswap is based on using liquidity pools for trading and the price is determined by x * y = k where x and y are the reserve balances and k is always constant.

  • In Uniswap V1, you can create or add liquidity to a DyDAI and ETH pool which will allow you to hedge your ETH position with an interest-earning token. In return for providing liquidity, you would also earn 0.3% of each trade executed.
  • In Uniswap V2, you can create or add liquidity between two interest-earning tokens such as DyDAI and cDAI, or DyDAI and aDAI. This will maintain profits from both Compound and DyDx independent from ETH or BTC volatility. You would also earn 0.25% of each trade.


Balancer is in a way like Uniswap. They both use liquidity pools as a mechanism for decentralized trading. How balancer differs is that you are able to create liquidity pools of multiple tokens instead of just a pair. This allows for the pool liquidity token to act like an index fund where traders trade to leverage arbitrage opportunities.

  • You can create (or provide liquidity) to a pool that holds all interest-bearing token like aDAI, iDAI(RIP), cDAI, CHAI, etc. Supplying liquidity hear mean you hold an index of all the tokens in the pool. Rebalancing is done by traders according to market forces while you will receive 0.2% of each trade.

Idle Finance

Idle Finance uses aDAI and cDAI at the moment to chase the highest interest rate. It works by rebalancing anytime someone interacts with the contract.

  • Idle Finance can incorporate DyDAI to add DyDx interest rates as a part of its interest rate chasing yielding higher returns.

Trust wallet

Trust Wallet is multi-cryptocurrency wallet that shows us our total holding as well as being a DApp explorer.

  • When we invest into a DApp such as DyDx we are not show the value of our holdings accurately because our DAI is in the DyDx protocol and not in our wallet.
  • Instead, investing in DyDAI we can see the accurate value of our holdings. (Assuming Trust wallet adds the price oracle for DyDAI)

Swap Rate

Now because of DyDAI we hedge against or get the best out of the interest rate fluctuations on decentralized finance, using their derivate protocol.

Melonport and Betoken

Melonport and Betoken are Asset management DApps which were unable to invest into the DyDx supply interest rate but now by investing into DyDAI they can.


Opyn allows us to create oTokens which are basically insurance for the underlying asset.

  • The creation of oDyDAI allows you to hedge your DyDAI against high fluctuation and even smart-contract risk from both the DyDAI contract as well as MakerDAO.

Get some DyDAI at

If you can think of any other ways DyDAI can be useful do tweet at us or join our Discord!


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