On Thursday, crypto derivatives platform dYdX, that is presently built on Ethereum layer 2, announced that it might be relocating to a standalone blockchain in line with the Cosmos SDK and Tendermint proof-of-stake consensus because of its v4 update. The firm cites the Cosmos blockchain’s decentralization and gratifaction as reasons as a “best fit” for building dYdX for v4.
We’re excited to announce that dYdX V4 is going to be developed like a standalone Cosmos-based blockchain! https://t.co/zQzZMIpzWO
— dYdX (@dYdX) June 22, 2022
Presently, the present dYdX protocol processes about 10 trades per second and 1,000 order placements and cancellations per second, with the aim of scaling to magnitudes greater. However, the firm states that neither Ethereum layer 1 nor layer 2 solutions can meet its needs for throughput speed whilst satisfying its 100% decentralization requirement through the finish of the season.
All dYdX code is going to be open-source, and also the protocol itself will operate on open permissionless systems without any services being run by parent entity dYdX Corporation. All validators and node operators will run the main node software, that will handle consensus, off-chain orderbook matching, deposits, transfers, withdrawals and cost oracles. Additionally, traders does not need to pay gas charges to trade, only charges for performed trades much like those of dYdX v3 and centralized exchanges. Charges will be distributed as rewards to validators and stakers.
In addition, dYdX seeks to bridge blockchains by leveraging Cosmos’ inter-blockchain communications protocol. By doing this, dYdX can bridge digital assets, for example stablecoins, from other guaranteed chains on Cosmos. Top priorities in development range from the change in collateral for buying and selling from/to blockchains for example Ethereum in addition to centralized exchanges. Since its beginning last Feb, the protocol has processed over $626.6 billion in digital asset derivatives buying and selling volume.
