Summary
This proposal seeks to adjust the tick sizes for a set of perpetual markets on dYdX to better reflect current price levels and trading conditions. The goal is to reduce suboptimally wide minimum spreads, improve execution quality, and enhance competitiveness against other perpetual exchange venues.
Abstract
Tick size defines the smallest allowable price movement in a market. On dYdX, tick sizes are static, meaning they do not automatically scale as asset prices rise or fall. As a result, when prices drift materially over time, the effective tick size (measured in basis points) can become disproportionately large.
For several markets listed on the specification below, this has led to suboptimally wide minimum spreads. Traders are often forced to cross spreads that are significantly wider than those on competing platforms, by 10–50x or more, leading to higher transaction costs, reduced market efficiency, and weaker liquidity-provision incentives.
This proposal seeks to realign tick sizes with prevailing price levels to restore tighter spreads and improve overall market quality.
Motivation & Rationale
Tick sizes on dYdX are static and do not adjust as asset prices move. As prices drift over time, the effective tick size in basis points can become disproportionately large, resulting in wide minimum spreads across several of the listed markets. This increases execution costs for traders, limits market makers’ ability to quote tightly, and degrades overall market quality. In some cases, traders are forced to cross spreads that are materially wider than those on competing venues.
Adjusting tick sizes would realign price increments with current market levels, enabling tighter spreads and more efficient price discovery without changing any funding, margin, or risk parameters. This is a mechanical market-structure improvement aimed at reducing unnecessary trading friction and improving the competitiveness and usability of affected markets.
Specification & Next Steps
The list of markets that we propose to change is available [here]. We will update the spreadsheet regularly and send batches of parameter change proposals accordingly.