The Ethereum-based decentralized trading platform dYdX will be deployed as an independent blockchain in the Cosmos ecosystem. The project team made ad this morning, leading to a positive response to the DYDX Governance Token.
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At the time of writing, this token is trading at $1.50 with an 8% gain in the last 24 hours for its USDT trading pair and a 10% profit for its ETH trading pair. Meanwhile, larger cryptocurrencies are facing headwinds and may continue to consolidate around their current levels.
The autonomous blockchain is part of the fourth version of this platform, dYdX v4. The team behind the project expects to “open source dYdX V4 by the end of 2022”, but as they explained, this iteration will provide “critical” improvements, so “it will take months of hard development”.
The team behind the Ethereum-based trading platform chose Cosmos and its Proof-of-Stake (PoS) Tendermint consensus due to its security, decentralization, customizability, cross-chain capabilities, and exploiting its scalability.
In this way, the platform will be able to process more transactions and potentially increase its market share, number of users, and trading volume as it moves to the next stage of development: full decentralization. The project team said:
The main requirement for the V4 protocol is complete decentralization. The decentralization of the system is equal to the decentralization of its least decentralized component. This means that every part of V4 must be decentralized, yet still performant.
The end goal, according to the announcement, is to make dYdX “one of the largest exchanges in all of crypto.” This requires an infrastructure capable of handling multiple transactions and supporting the mechanism of an exchange without compromising its level of decentralization.
The team behind the project added:
The development of an off-chain decentralized order book and the move from Ethereum to a dYdX-specific chain as the main DeFi protocol is largely untested, but we believe it gives dYdX the best chance to offer a competitive product with centralized exchanges.
Is moving away from Ethereum the best choice for decentralized applications?
The fourth iteration of dYdX will have new features such as an offline order book and no gas trading fees. The commission structure will be similar to that of centralized exchanges. The DYDX governance token will remain a core component of the exchange’s governance model.
The announcement was welcomed by part of the crypto community, and the market seemed to react positively. However, others have raised concerns as they feel that the standalone version of dYdX lacks security and layout capability or design flexibility.
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Analyst Ryan Watkins said the following in the dYdX declaration:
While I understand the desire for sovereignty and the need to scale faster, I’m not sure why an application chain is the best way forward. Losing security and composability (as opposed to Starknet deployment) with the Ethereum ecosystem seems risky.
Credit : www.newsbtc.com