.png){kind=logo}
dYdX, a decentralized exchange focused on providing perpetual contracts, is migrating away from Ethereum and spinning up its blockchain thanks to the Cosmos SDK. The team expects the move to greatly help the protocol's decentralization and processing capacity. The team behind the protocol announced today in a blog post a new version of dYdX which, instead of being based on Ethereum, will be its blockchain in the Cosmos ecosystem. The upgrade, called V4, aims at fully decentralizing the protocol, which according to the team means ensuring the "decentralization of [the project's] least decentralized component."
In a recent announcement, dYdX stated that it has called quits on the Ethereum ecosystem and launched its blockchain within Cosmos. Antonio Juliano, founder, and CEO of dYdX said that the new blockchain will allow the decentralized exchange to offer the best experience to users.
Why Cosmos?
dYdX described the move as "rebuilding dYdX as a standalone Cosmos based blockchain featuring a fully decentralized, off-chain, order book, and matching engine." The rebuild will be the fourth version of the DEX using the Tendermint consensus mechanism.
Through the utilization of the Cosmos SDK, the migration will allow the new version to offer, among other features, "full decentralization." Further, Cosmos offers an almost unrivaled cross-chain interoperability through the IBC protocol.
DYdX explained why it initially moved over to the platform in a 2020 blog post: "Ethereum can process around 15 transactions per second (TPS), which is not enough to support the hypergrowth of DeFi, NFTs, and more. While Ethereum 2.0 will theoretically boost network speeds to 100,000 TPS, base layer scaling is still a while away. In the meantime, Layer 2 scaling solutions – in the form of Rollups – free up Ethereum's base layer by offloading execution, leading to reduced gas costs and increased throughput without increasing network load. StarkWare's dYdX integration combines STARK proofs for data integrity with on-chain data availability to ensure a fully non-custodial protocol"
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
