Tech

Introducing the dYdX Chain: A Leap Towards Full Decentralization on Cosmos

dYdX Trading, the pioneer behind the decentralized derivatives exchange, dYdX, has just unveiled its groundbreaking v4 code, signaling the birth of dYdX v4. This innovative release introduces the dYdX chain, a standalone blockchain developed on the Cosmos SDK and CometBTF proof-of-stake consensus protocol, designed to host a fully decentralized DEX.


The code is now available for the community, ushering in a new era where third-party validators, nodes, and community contributors will collaboratively launch the dYdX Mainet pending a governance vote led by the dYdX Foundation.

Once approved, dYdX v4 will herald a fully decentralized, community-owned model, with dYdX Trading Inc. relinquishing control and ceasing to collect trading fees. Instead, decisions will be guided by the community of stakeholders and ecosystem participants. Importantly, the existing dYdX exchange will continue to operate alongside v4 for an unspecified transitional period.


Antonio Juliano, Founder and CEO of dYdX Trading, expressed the significance of this release: "Today's release of the dYdX Chain is a huge moment for both dYdX and DeFi.

"With $1 Billion of crypto derivatives traded per day, dYdX has become a leader in DeFi."


Antonio Juliano, Founder and CEO of dYdX 

The dYdX Chain software release marks the full decentralization of dYdX, and is a big step on our mission to democratize access to financial opportunity," added Antonio.


In the event of approval, all components of the v4 exchange, including the orderbook and matching engine, will operate autonomously via audited smart contracts and a dedicated blockchain, eradicating centralized control and empowering the community.

Key features of the newly open-sourced dYdX v4 encompass a fully decentralized, real-time, in-memory orderbook and high-performance matching engine suitable for professional traders and institutions. v4 boasts impressive scalability, supporting up to 1-2 thousand transactions per second.


It embraces on-chain settlement for fairness and transparency, eliminating issues like frontrunning and censorship. Furthermore, it facilitates the rapid addition of new markets and places the stack under full community control via the dYdX Foundation's governance system.

Unlike traditional models, trading and gas fees will be distributed directly to validators, eschewing centralized entities. The open-source blockchain software offers flexibility, permitting users to onboard with their preferred wallet, whether Ethereum native, Cosmos native, or another compatible option.

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