DYDX Market Maker Initiative

We are using the industry standard loan-option model to engage in liquidity services with Pulsar, a well-known and reputable market maker (Reverie has worked with them across other protocols). In this model, the DEP will lend 250,000 DYDX for 12 months, with an option for Pulsar to acquire the DYDX at term expiration should DYDX hit the different strike prices (which are priced at considerable premiums to today’s market price). If the term ends with the market price below strike, Pulsar will return the original 250,000 DYDX. If the term ends with the market price above strike, we can expect Pulsar to acquire the DYDX and return USDC to us instead, effectively serving as a DYDX conversion for the DEP.

Pulsar will provide DYDX liquidity on Binance, OKX, Coinbase International, Bitget, and Kucoin with 95% uptime, a 35bps spread, and 1% to 2% depth varying across exchanges. We’ll monitor their activity via weekly reports, and work with them to improve exchange support on new venues.