What is Paradex? The Privacy-First Zero-Fee DEX
Paradex is a decentralized derivatives exchange built on Starknet's first AppChain, developed by Paradigm (an institutional crypto liquidity network, not the VC firm). Launched in July 2023 following the FTX collapse, Paradex aims to combine "CeFi liquidity with DeFi transparency and self-custody."
What sets Paradex apart is its revolutionary zero-fee trading for retail users, continuous funding rate system (industry first), and ZK-encrypted privacy that protects your trading data from front-runners and MEV attacks.
Key Metrics (January 2026):
- TVL: $223.58M (Total Value Locked)
- 30-Day Volume: $36.59B
- Cumulative Volume: $208.76B+
- Open Interest: $656.35M
- Markets: 600+ (BTC, ETH, altcoins, FX, synthetic indices)
- Max Leverage: Up to 50x
- Funding: Continuous settlement (industry first)
- Trading Fees: 0% (for retail users)
- KYC: Not required
- Blockchain: Starknet AppChain (DimeVM)
Key Specifications
Platform Type: Decentralized Exchange (DEX)
Blockchain: Starknet AppChain with DimeVM
Trading Options: Perpetual futures, Perpetual options, Spot
Maximum Leverage: 50x (varies by asset)
Deposit Method: USDC via multiple bridges (Ethereum, Arbitrum, Base, Solana, etc.)
KYC: Not required
Supported Wallets: MetaMask, Argent X, Braavos, WalletConnect, Email/Social Login (Privy)
Paradex's Revolutionary Features
Paradex introduces several industry-first innovations that make it unique among DEXs.
Zero-Fee Trading (RPI System):
The Retail Price Improvement (RPI) system enables completely free trading for individual investors. Professional market makers pay a small 0.005% fee when matching with retail orders, which funds the free trading for retail users.
Continuous Funding Rate:
Unlike traditional 8-hour funding (Binance, Bybit) or hourly funding (Hyperliquid), Paradex settles funding continuously in real-time. This prevents funding spike manipulation and ensures more stable perpetual-spot price convergence.
ZK-Encrypted Privacy:
Your position information, entry/exit prices, liquidation levels, and PnL are all encrypted on-chain. This protects against front-running, large position hunting, MEV attacks, and copy trading.
Perpetual Options:
Trade options without expiration dates. Long positions have no liquidation risk - your maximum loss is only the funding paid. Options use a 5-day equivalent funding period.
Fee Structure
Retail Users (Individual Traders):
- Maker Fee: 0%
- Taker Fee: 0%
- Hidden Costs: None
Pro Traders / Market Makers:
- When matching with retail orders: 0.005%
- Standard fees apply for pro-to-pro matches
Funding Rate Caps:
Fee Comparison vs Competitors:
| Exchange | Maker | Taker | Funding |
|---|---|---|---|
| Paradex | 0% | 0% | Continuous |
| Hyperliquid | 0.01% | 0.025% | 1 hour |
| Bybit | 0.02% | 0.055% | 8 hours |
| Binance | 0.02% | 0.05% | 8 hours |
How to Register
Since Paradex is a DEX, there's no traditional account registration. Simply connect your wallet and start trading.
What You Need:
- A compatible wallet (MetaMask recommended)
- USDC for trading margin
- Works from any country (no geo-restrictions, no KYC)
Connection Steps:
- Visit Paradex Official Site
- Click "Connect Wallet"
- Select your wallet (or use Email/Social Login via Privy)
- First-time users get a Starknet account created automatically
How to Deposit
Paradex accepts USDC deposits via multiple bridging options.
Available Bridges:
| Bridge | Supported Chains | Features |
|---|---|---|
| StarkGate (Official) | Ethereum | Most secure, trustless |
| Orbiter Finance | 16 chains | Arbitrum, Base, Solana, TON, etc. |
| Rhino.fi | EVM chains | Fast bridge |
| Layerswap | EVM chains | User-friendly |
| Hyperlane | ETH, Arb, Base, Solana | Multi-VM support |
Deposit Steps (via Orbiter):
- Go to Portfolio tab, click "Deposit"
- Select "Cross-Chain"
- Choose source chain (e.g., Arbitrum)
- Enter USDC amount
- Approve transaction
Note: Hyperlane currently supports deposits only (no withdrawals yet).
$DIME Token & Airdrop
DIME is Paradex Chain's native gas token and the core of its ecosystem.
Community Airdrop Allocation (20% of total supply):
- Season 1 (Pre-Season included): 5% - Already distributed
- Season 2: 15% - Extended to January 2026
- Weekly XP distribution: 4,000,000 XP
- Estimated cumulative XP: ~310M at Season 2 end
How to Earn XP:
| Category | Weekly Allocation | Details |
|---|---|---|
| Fee Volume XP | Up to 700,000 | Based on trading volume |
| LP/Vault XP | 300,000 | For liquidity providers |
| OI (Open Interest) XP | Variable | Based on position size |
| TVL XP | Variable | Based on deposited assets |
Referral Program:
- Standard referral: 10% commission on referee's XP
- Affiliate program: Up to 25% XP bonus + 25% taker fee share
- TAP (Token-Aligned Program): 1% of total supply reserved
Important: January 2026 Incident
BTC $0 Flash Crash Event
On January 19, 2026, a database migration error during maintenance caused the price oracle to malfunction, displaying BTC at $0 temporarily.
Impact:
- Mass liquidations triggered incorrectly
- Users unable to access accounts
- Market data unavailable
Resolution:
- Chain rollback to block 1,604,710
- All accounts restored to pre-maintenance state
- Open orders force-cancelled
- Trading resumed after ~8 hours
Key Concerns:
- User funds were ultimately protected
- However, the rollback contradicts blockchain immutability principles
- Demonstrates centralized decision-making capability
- Similar counterparty risk to CEXs exists
Risk Management Recommendation: This incident shows that even DEXs have central points of failure (oracles, databases). Diversify assets across multiple exchanges.
Security & Risks
Security Strengths:
- Self-custody: Your assets remain in your control
- STARK proofs: Quantum-resistant cryptography
- Ethereum-level security: State updates anchored to Ethereum
- Insurance fund: 70% of liquidation penalties
- Paradigm liquidity backup: Deep liquidity from day one
Risks to Consider:
- Emerging DEX: Less than 3 years of operation
- Off-chain components: Matching engine, risk engine are off-chain
- Rollback precedent: See above incident
- OTC scams: Beware of unofficial XP point sales
Comparison with Other Exchanges
| Feature | Paradex | Hyperliquid | Lighter | Bybit |
|---|---|---|---|---|
| Type | DEX | DEX | DEX | CEX |
| Chain | Starknet AppChain | Custom L1 | Ethereum L2 | Centralized |
| TVL | $223M | $6B+ | $50M | N/A |
| 30-Day Volume | $36.5B | $300B+ | $5B | $100B+ |
| Taker Fee | 0% | 0.025% | 0% | 0.055% |
| Maker Fee | 0% | 0.01% | 0% | 0.02% |
| Funding | Continuous | 1 hour | 8 hours | 8 hours |
| Max Leverage | 50x | 50x | 20x | 100x |
| Options | Yes | No | No | Yes |
| Privacy | ZK encrypted | None | ZK rollup | None |
| KYC | Not required | Not required | Not required | Partial |
Delta Neutral Strategy Use
Paradex is highly suitable for delta neutral strategies:
- Zero fees eliminate position entry/exit costs
- Continuous funding removes timing concerns
- ZK privacy protects large positions from hunting
- Unified margin enables efficient multi-position management
Recommended Approach:
Use Paradex for short positions with zero fees, while holding spot on another exchange. Vault LP tokens can serve as additional collateral.
Summary
Paradex is a next-generation DEX offering zero fees, ZK privacy, continuous funding, and perpetual options. Backed by Paradigm's institutional liquidity, it delivers CEX-level depth while maintaining decentralization.
Best For:
- Traders seeking zero trading costs
- Privacy-conscious large investors
- Users targeting $DIME airdrop
- Options trading enthusiasts
- Delta neutral strategists
Caution Advised:
- Users needing non-English language support
- Those requiring CEX-level stability
- Low risk tolerance users
Season 2 airdrop has been extended to January 2026. There's still time to participate!
Delta-Neutral Strategy Impact
Paradex uses a continuous funding system, allowing you to build delta neutral positions without worrying about funding timing. With zero fees, position entry and exit costs are completely eliminated. ZK encryption protects large positions from hunting, and institutional-grade deep liquidity minimizes slippage. Vault LP tokens can be used as collateral to further increase capital efficiency.