21Shares launched the DYDX ETP this week to give institutions regulated access to decentralized derivatives. The DYDX ETP trades in European markets and is backed one-to-one by DYDX tokens held by custodians. Flow Traders will handle daily creations and redemptions to keep NAV aligned for the DYDX ETP. The dYdX Foundation and the dYdX Treasury subDAO coordinated with 21Shares on product design. This exchange-traded product aims to bridge DeFi derivatives and institutional adoption.
Institutional access unlocked
The DYDX ETP packages DeFi derivatives exposure into a familiar exchange-traded product for investors. It solves custody and compliance gaps by using regulated custodians to hold DYDX tokens. Institutions in European markets can buy the DYDX ETP on exchanges without self-custody complexity. Uniswap and Aave sit alongside dYdX as complementary building blocks for institutional allocations. That structure aims to accelerate institutional adoption of decentralized derivatives.
How the product works
Each DYDX ETP share is backed one-to-one by DYDX tokens held by custodians. Flow Traders provides liquidity with creation and redemption operations daily for the DYDX ETP. The ETP mirrors token economics but keeps trading and settlement in a regulated wrapper. Pricing is linked to NAV and on-exchange trades reflect the DYDX ETP’s underlying holdings. Operationally, the product balances DeFi protocol exposure with institutional controls.
Why Europe matters
European markets have clearer frameworks for crypto ETPs, letting the DYDX ETP list to institutional clients. Regulatory clarity reduces friction for banks, custodians, and asset managers to adopt DeFi derivatives. 21Shares already runs dozens of crypto ETPs and extends that experience to the DYDX ETP. That track record helps reassure investors on custody and compliance for decentralized exposure. A European listing also enables cross-border flows into DeFi-focused exchange-traded products.
Market infrastructure partners
Flow Traders’ role as market maker keeps spreads tight on the DYDX ETP. Custodians hold DYDX tokens, creating a bridge between on-chain liquidity and the DYDX ETP. 21Shares coordinated with the dYdX Foundation and the subDAO operator kpk to ensure protocol sovereignty. Uniswap pools and Aave liquidity support the broader ecosystem that underpins DeFi derivatives. The setup aims to maintain dYdX’s decentralization while offering regulated exposure.
What this means
The DYDX ETP is a clear step toward mainstream institutional adoption of DeFi derivatives. Institutions gain transparent exposure without navigating raw smart contracts and custody themselves. This product could unlock flows similar to other 21Shares ETPs, boosting liquidity for DYDX. Traders may treat the DYDX ETP like any other exchange-traded product for portfolio allocation. Over time, more DeFi protocols may see similar ETP wrappers.
Additional context
dYdX’s protocol has recorded about $1.4 trillion in cumulative trading volume across 230 perpetual markets. The DYDX ETP ties that on-chain activity to regulated market structures for traditional investors. Mandy Chiu at 21Shares emphasized the need for compliant access to DeFi derivatives. Charles d’Haussy of the dYdX Foundation highlighted protocol sovereignty and custodial safeguards. Market participants should watch creation/redemption flows and trading volumes for early signals.
Frequently asked questions about DYDX ETP (FAQ)
What is the DYDX ETP?
The DYDX ETP is an exchange-traded product that tracks DYDX token exposure for investors. The DYDX ETP is backed one-to-one by custodial DYDX token holdings.
Who can buy the DYDX ETP?
Institutional and retail investors in European markets can access the DYDX ETP via listed exchanges, subject to local rules and broker availability.
How does the DYDX ETP keep pricing accurate?
Flow Traders performs daily creations and redemptions to align market prices with the DYDX ETP’s NAV. Custodians provide secure token custody.
Does this affect dYdX decentralization?
The product is designed to preserve the DYDX blockchain’s sovereignty. The dYdX Foundation says the ETP wraps exposure without centralizing protocol control.
Who issued the product?
21Shares issued the DYDX ETP with operational support from the dYdX Foundation, the dYdX Treasury subDAO, Flow Traders, and qualified custodians.
Sources to this article
21Shares (2025) ’21Shares launches DYDX ETP’, 21Shares press release. Available at: https://21shares.com/press/21shares-launches-dydx-etp (Accessed 11 September 2025).
dYdX Foundation (2025) ‘dYdX Treasury and ETP collaboration’, dYdX Foundation blog. Available at: https://dydx.foundation/blog/treasury-etp-collaboration (Accessed 11 September 2025).
Flow Traders (2025) ‘Market making for crypto ETPs’, Flow Traders statement. Available at: https://flowtraders.com/insights/crypto-etp-market-making (Accessed 11 September 2025).
