As dYdX [DYDX] freezes out of Canada, how did its indicators perform
- dYdX announced the winding down of user access for Canadian users.
- The dYdX token was attempting recovery on a daily timeframe, while active addresses and volume declined.
On 7 April, dYdX [DYDX] announced that the firm would begin the process of limiting access to its platform for users located in Canada. The first step involved suspending the onboarding of new users from the country. Then, as per the announcement, on 14 April, dYdX will transition all Canadian users into a “close-only mode,” permitting them to only withdraw their funds.
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dYdX is a decentralized exchange (DEX) that operates on the Ethereum [ETH] blockchain. Through this platform, users can engage in peer-to-peer trading of cryptocurrencies and various other digital assets without intermediaries, unlike centralized exchanges. This unique approach to trading allowed for increased privacy, security, and control over one’s assets.
Canada takes a strict stance on trading platforms
On February 22, the Canadian Securities Administrators (CSA) released a notice outlining the new requirements for crypto asset trading platforms (CTPs) looking to register in Canada. These CTPs, like dYdX, must now agree to a new version of preregistration undertakings (PRUs), which are legally binding documents. Regulated CTPs will receive notification from their principal regulators regarding compliance with these new obligations.
The updated commitments aim to enhance investor protections in response to the recent wave of CTP insolvencies in 2022. Specifically, the regulators referred to the insolvencies of FTX, Celsius, and Voyager in the document. As a result of these stricter regulations, there is a possibility that more CTPs could exit the Canadian market in the future.
dYdX metrics decline
Even before the aforementioned announcement, there had been a noticeable impact on dYdX’s active addresses. According to data from Santiment, there has been a decline in the number of active addresses since around 31 March.
While there have been attempts at recovery, the metric was still far below its earlier levels in the year. As of this writing, the number of active addresses on the platform was around 410.
In addition to the decline in active addresses, its volume metric has also declined. Santiment’s analysis of the volume metric indicated a noticeable decrease, and while there has been some recovery, it remained relatively low.
As of this writing, the volume metric for dYdX was over 59 million. The volume was significantly lower than the over 200 million it saw in March before the decline.
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DYDX on a daily timeframe
On a daily timeframe, DYDX had experienced a decline in value, losing over 3% on 7 April. However, as of this writing, it had regained almost 1% and was currently trading at around $2.48. While the token remained below the neutral zone on the Relative Strength Index, it had attempted to push above it.