On Thursday, crypto derivatives platform dYdX, which is currently built on Ethereum Layer 2, announced that it will move to a standalone blockchain based on the Cosmos SDK and Tendermint Proof-of-Stake consensus for its V4 update. The firm cites the decentralization and performance of the Cosmos blockchain as reasons why it is “best fit” to build dYdX for V4.
The existing dYdX protocol currently handles about 10 trades per second and 1,000 order placements and cancellations per second with the goal of scaling to higher numbers. However, the firm says that neither the Ethereum Layer 1 nor Layer 2 solutions can meet its throughput requirements as well as meet its 100% decentralization requirements by the end of the year.
All dYdX code will be open source and the protocol itself will operate on open networks without permissions, and no services will be managed by the parent organization dYdX Inc. All validators and node operators will run the core node software that will handle the off-chain consensus. order book matching, deposits, transfers, withdrawals and price oracles. In addition, traders will not need to pay gas fees to trade, but only fees for transactions made, similar to dYdX V3 and centralized exchanges. The fees will then be distributed as a reward between validators and stakers.
In addition, dYdX aims to unify blockchains using the Cosmos blockchain protocol. In this way, dYdX can connect digital assets such as stablecoins directly to other secure chains on Cosmos. Top development priorities include transferring collateral for trading from/to blockchains such as Ethereum as well as centralized exchanges. Since its inception in February last year, the protocol processed the volume of trading in derivative digital assets exceeded $626.6 billion.
We are happy to announce that dYdX V4 will be developed as a standalone blockchain based on Cosmos! https://t.co/zQzZMIpzWO
— dYdX (@dYdX) June 22, 2022
Credit : cointelegraph.com