Ethereum dYdX Will Launch Standalone Blockchain On Cosmos

The Ethereum-based decentralized trading platform dYdX will be deployed as an independent blockchain on the Cosmos ecosystem. The team behind the project did the work Advertising This morning led to a positive reaction to the governance token DYDX.

Related reading | Bitcoin Steady Above $20K After Falling to $17K – Slow Climb to the Green?

At the time of writing, this token is trading at $1.50 with 8% profit in the last 24 hours for the USDT trading pair and 10% profit for the ETH trading pair. In the meantime, the larger cryptocurrencies are facing hurdles and could continue to consolidate around their current levels.

DYDX is in a downtrend on the 4 hour chart. source: DYDXUSDT TradingView

The standalone blockchain is part of the fourth iteration of this platform, dYdX v4. The team behind the project expects to “open source dYdX V4 by the end of 2022,” but, as they explain, this iteration will provide “critical” improvements so it “will require months of direct development.”

The team behind the Ethereum-based trading platform Cosmos and the Proof-of-Stake (PoS) consensus chose Tendermint because of its security, decentralization, customization, cross-chain capabilities, and benefit from scalability.

Thus, the platform will be able to process more transactions, possibly increasing market share, number of users, and trading volume as it moves to its next development stage: full decentralization. The team responsible for the project said:

The main requirement for the V4 protocol is complete decentralization. The decentralization of the system equals the decentralization of its less decentralized components. This means that every part of V4 needs to be decentralized while maintaining performance.

The ultimate goal, according to the announcement, is to make dYdX “one of the largest exchanges in all of the cryptocurrencies.” This requires an infrastructure capable of processing a lot of transactions and supporting the exchange’s engine without compromising the level of decentralization.

The team behind the project added:

The development of an off-chain decentralized order book and the migration from Ethereum to dYdX’s own blockchain as the main DeFi protocol has not been tested much, but we believe this gives dYdX the best opportunity to offer a competitive product experience with centralized exchanges.

Is leaving Ethereum the best option for dApps?

The fourth iteration of dYdX will have new features, such as an off-chain order book, and no gas trading fees. The fee structure will be similar to that of centralized exchanges. The governance token DYDX will continue to be a key component of the exchange’s governance model.

The announcement was celebrated across a portion of the crypto community, and the market appears to have reacted favorably. However, others have expressed concerns because they believe the standalone version of dYdX will lack security and compositibility, or design flexibility.

Related reading | Ethereum (ETH) Market Cap Drops Over $124 Billion in Six Weeks

Analyst Ryan Watkins He said The following is in the dYdX ad:

While I understand the desire for supremacy and the need to scale more quickly, I’m not convinced that the application chain is the best way forward. Loss of security and composability (as opposed to deployment on Starknet) with the Ethereum ecosystem seems risky.

Leave a Comment

Your email address will not be published. Required fields are marked *