Key Takeaways
- The company stated that the goal of dYdX v4 is to maintain decentralization while maintaining high levels of order processing.
- DYdX positions itself as the biggest decentralized derivatives trading exchange with more than 690 million dollars in trade volume over the past 24 hour.
The blockchain of a crypto derivatives platform that is based on Ethereum’s layer-2 blockchains has been developed.
The new product, dYdX’s Cosmos-based platform will use Tendermint’s Proof-of-Stake protocol for validating transactions. The Layer-2 protocol is built over popular blockchains such as Ethereum or Bitcoin. It’s typically used to scale technology, increase efficiency, and add new features.
The game plan for dYdX V4 — the exchange laid out by the company in January — is to be fully decentralized by the end of the year.
“Developing a decentralized, off-chain order book and matching engine and moving from Ethereum to a dYdX-specific chain as a major [decentralized finance] protocol is very much untested, but we believe it gives the dYdX ecosystem the best shot at having a network that could offer a long term competitive product experience with centralized exchanges,” The company made a public statement.
Founded in 2017 by ex-Coinbase and Uber engineer Antonio Juliano, dYdX is positioning itself as the largest decentralized derivatives exchange — with more than $690 million in trading volume in the past 24 hours, according to CoinGecko data.
The company noted the existing dYdX product processes at about 10 trades per second and about 1,000 order placements/cancellations per second.
Each validator is a part of the vision that the company has for dYdX v4. “run an in-memory orderbook that is never committed to consensus” Such as off-chain. In the meantime, real-time data is available. “orders will be matched together by the network. The resulting trades are then committed on-chain each block.”
The company’s spokesperson did not immediately respond to a comment request.
In August 2020 dYdX partnered up with StarkWare in order to scale the decentralized trading. In June 2021, the company received $65 million from Paradigm in its Series C round of funding.
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