BTCWith an increase in the number of retail investors dabbling in derivatives trading and investors hopping into decentralized exchanges (DEXs) due to regulations in the United States and China, there has been a rise in users utilizing derivatives DEXs, with Bitcoin (BTC) whales moving into derivatives and an increase in buying interest in derivative contracts.

This has created a surge in the daily trading volume for derivatives protocols, allowing them to briefly take over centralized finance platforms such as Coinbase, which sparked interest in retail investors with regard to moving towards derivatives trading in decentralized finance (DeFi). However, without a proper introduction to derivatives in DeFi, new investors are likely to hop off derivatives trading as quickly as they hopped on.

But is this the case in the current DeFi sector?

Derivatives in DEXs: Are they worth the risk?

Derivatives in DeFi bring the rewards but leave behind the inefficiencies that traditional finance offers. However, the crypto market is a volatile one, to say nothing of the complexity of trading derivatives on DEXs, in which retail investors have to learn to make the trades by themselves. These investors require guidance and knowledge on both DeFi and platform navigation when they enter derivatives for the first time.

Related: Decentralized and traditional finance…


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