Hi everyone, we’d like to propose adding an ORDI-USD perpetual market to the dYdX Chain. Ordinals (ORDI) is the leading BRC-20 token on the Bitcoin blockchain with a market capitalization of $1.5b and strong trading volume.
Summary
Wintermute is proposing to add ORDI-USD to the dYdX Chain.
Motivation & Rationale:
ORDI is the leading BRC-20 token with a market capitalization of $1.5b and an average daily trading volume of $224M over the past 180 days. ORDI is part of a growing BRC-20 sector (~$3b Market Cap) and sub-sector of Bitcoin Inscriptions. It’s currently listed on major exchanges like Binance, OKX, Bybit, etc. and we think it will be a great addition to dYdX’s market offerings.
Specification
Using the newly released market listing UI, we are proposing to list ORDI as a long-tail asset given its market cap, age, and trading volume.
Oracles: Kucoin, Okx, Binance, Bybit, Gate, Huobi
Liquidity tier: 2
Initial Margin Fraction: 0.20
Maintenance Margin Fraction: 0.10
For further information regarding market listing parameters, please refer to the docs.
Next Steps
Assuming there is positive sentiment towards this listing, we will proceed with an on-chain vote in the next couple of days.
Chaos Labs supports the addition of ORDI-USD to the dYdX Chain and recommends listing under liquidity tier 2. In line with the criteria for introducing a new market as detailed in the v4 documentation, we present our analysis and the rationale behind our recommendation for ORDI’s listing.
Analysis
ORDI is currently listed for spot trading on exchanges, including Binance, OKX, Gate, Kucoin, Bybit, HTX, and MEXC, with its launch on May 7, 2023 (CoinGecko). 30d average Perpetual volumes for ORDI have also recently been north of $1.14bn, showing a robust market. With aggregate liquidity of $2.0m within a ±2% range, ORDI’s price stability is deemed robust enough against potential manipulation, qualifying it for listing on the dYdX Chain.
Liquidity Tier Recommendation
ORDI fulfills the requirements for a Long-Tail asset as defined in the dYdX v4 documentation, and, therefore, we suggest categorizing it under liquidity tier 2.
As outlined in the v4 documentation, liquidity tiers specify the margin requirements needed for each market and should be determined based on the depth of the relative market’s spot book as well as the token’s market capitalization.
ORDI aligns with the Oracle requirements: 7 out of 7 Oracle sources demonstrate liquidity greater than $50k on both sides, although the HTX feed is only recommended for instances where alternatives do not exist. Below are the volume and liquidity depth metrics for ORDI:
Given that it meets the Long-Tail criteria, we suggest listing ORDI at a liquidity tier of 2.
Hey @David this is a common misunderstanding, let me try to explain.
Firstly, dYdX is a DEX where only perpetual futures are traded. Perpetual futures are entirely synthetic instruments that track the price of an underlying. The only tokens relevant to dYdX are the native DYDX token, and USDC which is used as collateral backing the trading positions. It is solely the tokens price oracle defining the synthetic assets in each market that is relevant.
Markets can be anything with a price feed. A robust price source used for margining, liquidations, funding, and order triggers is all that is needed. This is why the focus is on liquidity and volumes of the underlying oracle sources, to ensure high fidelity price feeds. If a market has a token, this token does not interact with the dYdX Chain, only its price feed does.
With respect to ORDI, since the token does not interact with the dYdX Chain in any way the trust assumptions around it are not relevant for listing as a new market. As long as price formation in its trading is robust across multiple independent, it is an appropriate market to consider for the exchange.
