Deriva DAO is a decentralized exchange (DEX) for derivatives on the Ethereum blockchain. It distinguishes itself by offering key performance advantages over other DEXs, including a real-time price feed, rapid trade resolution, and a competitive fee structure. As a DAO from the outset, it empowers its traders and token holders to directly control and govern the platform. Deriva DAO seeks to bridge the gap between trading and blockchain by confronting the issues faced by both centralized and decentralized exchanges. It addresses the security vulnerabilities and potential regulatory challenges associated with centralized exchanges (CEXs) by operating as a DAO, thereby eliminating censorship concerns and the risk of a single point of failure. Additionally, it delivers a high-performance and capital-efficient user experience through an order book model, which tackles the liquidity and user experience issues often encountered in decentralized exchanges. By utilizing off-chain price feeds, a matching engine, and liquidation operators, Deriva DAO aims to achieve the speed and efficiency characteristic of centralized exchanges.

DerivaDAO was established by Aditya Palepu, an alumnus of Duke University and a former algorithmic trader with a background in software engineering. He is accompanied by a team of nine, including co-founder Frederic Fortier, a software engineer based in San Francisco with over ten years of experience in developing distributed systems. DerivaDAO is supported by a notable group of investors, having secured a total of $2.7 million through multiple funding rounds. The list of investors includes prominent names such as Polychain Capital, Coinbase Ventures, Electric Capital, Dragonfly Capital Partners, CMS Holdings, Three Arrows Capital, Calvin Liu (the strategy lead of Compound), and crypto researcher Phil Daian. For further information, you can visit Eulerpool.

DerivaDAO distinguishes itself in the decentralized exchange (DEX) sector through a unique architectural framework. Unlike traditional exchanges, DerivaDAO conducts trading and other exchange-related transactions via its DerivaDEX operator network rather than a public blockchain. The DAO oversees two types of staked insurance funds—those from its insurance mining program and organic insurance funds accrued from exchange fees on this Layer 2 (L2) network—to protect traders against auto-deleveraging. This specialized L2 solution allows Deriva to rival centralized exchanges (CEXs) in terms of speed and cost efficiency. High-frequency trading requires sub-second transaction finality, a condition met by Deriva's tailored L2 solution. Consequently, users are spared from high Ethereum gas fees. Leveraging this architecture, Deriva aims to facilitate the essential functions of a centralized exchange in a non-custodial setup. All funds are managed and secured by the Ethereum network. Unlike other L2 solutions such as zk-rollups or optimistic rollups, the centralized order sequencer on Deriva does not exercise discretion over the order flow (as it might on a CEX), and users do not experience prolonged wait times for on-chain transactions, which can occur with optimistic rollups.

The total supply of DDX is 100 million. Of this, 50% is distributed as part of the genesis supply, while the remaining 50% will be issued over ten years as part of the liquidity mining supply. The token allocation for DDX is as follows: * From the genesis supply, 34,005,404 DDX are allocated to the team and the DerivaDAO foundation, with 21,263,737 being unlocked upon the network launch. * 15,334,596 DDX from the genesis supply are designated for investors on a one-year linear schedule. * 660,000 DDX from the genesis supply are allocated to advisors, with 460,000 DDX distributed on a two-year linear schedule and 200,000 on schedules of three months or less. * From the liquidity mining supply, 2,500,000 DDX will be released linearly over one year as part of the insurance mining program. * The remaining 47,500,000 DDX will be emitted over the course of ten years.

DerivaDAO’s smart contracts have undergone an audit by Quantstamp, confirming their high quality. The protocol is secured by Ethereum, which ranks among the most popular blockchains for DAOs and is safeguarded by a proof-of-work consensus mechanism that involves miners generating new Ether. A network of decentralized nodes is responsible for validating transactions and maintaining the security of the Ethereum blockchain. Deriva’s custom Layer 2 solution features a purpose-built sidechain where operators execute code within trusted execution environments. This setup ensures the integrity of the code, preventing tampering and allowing for verifiable executions. Within its sidechain, Deriva employs Raft and a checkpoint consensus mechanism. Raft ensures the validity of orders and other exchange transactions by having operators relay a hash representing the entire state of the exchange to Ethereum.

DDX can be accessed on Coinbase Exchange, Uniswap (V2), Sushiswap, Hoo, and CoinEx.