---
# System prepended metadata

title: AMA

---

# AMA
## introduction

Hey there! Welcome to DerivaDEX's first AMA. We're really excited to get to know you. To make sure this is useful and enjoyable for everyone, we have a few ground rules:
- Golden rule. No trolling, name-calling, spamming, et cetera. You know the drill. 
- The DerivaDEX team can't answer every question: we may not know the answer, or we may not be able to answer for other reasons. Please be patient if this is the case. Our goal is to provide as much transparency as is feasible.
- DDX is a token used for the governance of the DerivaDAO. It is not a security or investment opportunity. We kindly ask you to not discuss or ask price-related things inside the DerivaDEX discord.
- When someone is working on your question, we'll leave a "star" reaction! Please give us a few minutes to make sure our answers are thorough and clear.
 

## Topic leaders

General uncategorized - Ainsley & Mathieu
Directional / vision - Aditya & Fred
Engineering - Alex, Jeff, Brennan
Product - Ainsley
DDX token - mathieu / ainsley

## Procedure:
1. react to a question you want to answer with a "star" emoji
2. Draft your answer in the Wire channel, and share a screenshot of the question
3. When you get a "like" from Fred, Aditya, or Ainsley-- go ahead and post it! (this process is going to help us smooth out any confusion). 



# Topics

## Token

### Token value
DDX is a token used for the governance of the DerivaDAO. It is not a security or investment opportunity.

### DDX
Initially, it will be possible to earn DDX via insurance mining. In the future, DDX will also be earned through other forms of liquidity mining: for example, trade-mining by users of the DerivaDEX exchange. 

### How do I earn DDX in insurance mining?
DDX is the native token that is used for governance on the DerivaDEX exchange, fee reduction on the exchange, and for other programs. DDX is earned by users who stake in the insurance mining program. Users will earn a share of DDX proportional to their stake, distributed each block. About 5% of DDX that will be emitted via liquidity mining will be distributed as part of the insurance mining program. DDX is not a fundraising device nor an investment opportunity. 

### When can I claim DDX?
You will be able to vote with your DDX tokens immediately. Prior to the lifting of a "governance cliff", DDX tokens are not transferable. When the governance cliff is lifted, there won't be any more restrictions on withdrawals or transfers. 

### Token economics
We will be publishing more granular details about our token economics in coming weeks. At a high level, 50% of DDX will be issued at genesis to the foundation, team, and investors. Foundation tokens will be used to support the healthy development of the DerivaDEX community and protocol as necessary. 50% will be released over a 10-year period as part of liquidity mining programs. This is part of our plan for the sustainable progressive decentralization of a complex product. 


## Governance and DAO
### DerivaDAO
The DerivaDAO is the governance mechanism for the DerivaDEX protocol. Any aspect of the protocol can only be modified via a successful governance procedure: there are no admin keys. 

### Governance
The DerivaDEX governance process requires a proposer, who has 1% of the circulating DDX supply. After a successful proposal, a snapshot is taken of all DDX balances: that is the amount of "voting power" DDX users will have for that particular proposal. If 50% of the circulating supply is reached, the proposal moves to the queue. If the quorum is reached, and the voting period ends, the proposal also moves to the queue. The queue is approximately three days, and after the queue the proposal is executed. 

### Governance discussion
We have a forum for the proposal and discussion of governance topics prior to on-chain submission. This will go live when we launch our governance front-end!

### Progressive decentralization
We're entering a market with high-performance, centralized competitors. We think that a policy of progressive decentralization, where initially the DerivaDEX foundation and investors have a higher degree of control, enable us to have a competitive and nimble development strategy. As the system matures, the role the foundation plays will become less central, and ownership of the DerivaDEX protocol will be more widely distributed.

### What is the governance cliff?
The governance cliff will be one of the first proposals submitted to the DerivaDAO. This proposal will decide on what date DDX tokens become transferrable, signaling our main-net launch. No DDX are transferrable prior to this event. This will build community knowledge and participation in the governance process, which is critical for the future of DerivaDEX.



## Insurance mining
### Insurance mining
Insurance mining is a year-long program where users can stake stablecoins to the insurance fund and earn DDX in return.

### Access to DerivaDEX
DerivaDEX products are not available to users in the U.S. We're following our legal guidance as best we can here.


### What happens when I stake?
When you stake in the insurance mining program, your stake is added to the DerivaDEX insurance fund. When the exchange is launched, this fund is used to prevent ADL (Auto de-leveraging) of traders on the exchange. If the fund is used in this way, the total capitalization of the fund may decrease. Until the fund regains value via organic capitalization (which occurs through normal trading and liquidations), your stake may have a lower dollar value. Before the exchange is live, the insurance fund will not be used. You can unstake at any time, and a 0.5% unstaking fee is applied.
### What happens when I unstake?
Aside from your gas fee for transactions (paid in ETH), there is an additional unstaking fee of 0.5% of the amount you unstake. This is paid in your collateral type, for example, USDT. This is to encourage long-term staking. You can unstake at any time, and a 0.5% unstaking fee is applied.

### Engineering boilerplate

We have an off-chain system of operators that have trusted hardware. This enables us to solve some of the key problems we've identified around gas price, trade volume, and transaction speed. 

We're using trusted hardware to securely connect to price feeds.


### Early Questions
What makes derivadex unique from other similar platforms?

Hi there, great news. My question is how do we get tokens assuming you will not be doing a token sale. The project is amazing, so definitely want to participate.

**Answer:** DDX can be earned via liquidity mining programs. Our first such program, insurance mining, bootstraps a robust insurance fund for the exchange. This particular program will release 5% of the 50 million DDX that are emitted via liquidity mining over the course of a year. 


### And another question (relevant to the above) - will there be technical / community challenges that we can complete to earn tokens or providing liquidity (or similar) would be the only option?

**Answer:** That's a great idea. Liquidity mining is a primary method for DDX emission. However, liquidity mining includes programs such as trade mining, where traders on DerivaDEX earn DDX per-trade. Additionally, the DerivaDEX foundation will also be responsible for supporting healthy community development and other ecosystem initiatives: for example, via trading competitions! 

### Will the addition of derivatives of traditional securities (such as stocks listed on NASDAQ) be considered for the DerivaDEX roadmap?

**Answer:** Our "launch products" will likely be BTC/USDT, ETH/USDT, and potentially a surprise. Additional trading products can be (and in fact, must be) added by the DerivaDAO via a transparent governance process. This means users of the DerivaDEX platform have a say in what products get listed, and that the listing process is transparent to all. 

### 1) What is a product that plays a core role in the DerivaDEX ecosystem? Where do the revenue / profits come from DerivaDEX? How will DerivaDEX distribute revenue / profits to bring profits to both projects / investors / users?

*Answer:* DerivaDEX foundation is tasked with supporting the growth and development of the DerivaDEX protocol. The core product is a decentralized derivatives exchane with the performance of a centralized exchange and the autonomy and security of a decentralized exchange.

### 2) Could DerivaDEX tell the community more about the DerivaDEX team and partner? 


### 3) What is DerivaDEX policy to attract and retain users?
**Answer:** We believe the key to growth and retention is to build a product that makes sense. This will necessarily be a combination of momentum and staying power. We're plannign for both: we have an innovative staking-based affiliate program, generous DDX-based fee reductions, and protocol-level strategies that put traders first. DerivaDEX is the first derivatives exchange that combines performance with autonomy, putting the decision about protocol parameters into users hands. For example, how much capital is it desirable for the insurance fund to carry? Which products should be listed?  We also prioritize performance: world-class liquidity and the infrastructure to support it.

### What makes derivadex unique from other similar platforms?
1. We expect to have world-class liquidity, and the infrastructure to support it. 
2. We support perpetual swaps, the single most popular trading product on centralized exchanges. The addition of new products is managed entirely transparently by the DerivaDAO.
3. Due to our off-chain matching and on-chain settlement, we expect fees to be highly competitive, even with centralized alternatives. 
4. Our insurance fund is transparently built and capitalized. The DerivaDAO determines the correct capitalization, meaning hidden fees are not passed on to users. 

