Ethereum dYdX Will Launch Standalone Blockchain On Cosmos, Token Jumps 10%
June 22 2022 - 11:57AM
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Ethereum-based decentralized trading platform dYdX will be deployed
as an independent blockchain on the Cosmos ecosystem. The team
behind the project made the announcement this morning leading to a
positive reaction for its governance token, DYDX. Related Reading
| Bitcoin Steady Above $20K After Drop To $17K – A Slow Climb
To Green? At the time of writing, this token trades at $1.50 with
an 8% profit in the last 24 hours for its USDT trading pair and a
10% profit on its ETH trading pair. In the meantime, larger
cryptocurrencies are facing hurdles and could continue to
consolidate around their current levels. The standalone blockchain
is part of this platform’s fourth iteration, dYdX v4. The team
behind the project expects to “open source dYdX V4 by the end of
2022” but, as they clarified, this iteration will provide
“critical” improvements so it will “require months of heads-down
development”. The team behind the Ethereum-based trading platform
picked Cosmos and its Proof-of-Stake (PoS) Tendermint consensus
because of its security, decentralization, customizability,
cross-chain capacities, and leverage its scalability. Thus, the
platform will be able to process more transactions, and potentially
increase its market share, amount of users, and trading volume
while moving to its next development stage: full decentralization.
The team behind the project said: The main requirement for the V4
protocol is full decentralization. The decentralization of a system
is equal to the decentralization of its least decentralized
component. This means that every part of V4 needs to be
decentralized while also remaining performant. The ultimate
objective, according to the announcement, is to make dYdX “one of
the largest exchanges in all of the crypto”. This requires an
infrastructure capable of processing a lot of transactions and
supporting the exchange’s engine without compromising its level of
decentralization. The team behind the project added: Developing a
decentralized off-chain orderbook and moving from Ethereum to a
dYdX-specific chain as a major DeFi protocol is very much untested,
but we believe this gives dYdX the best shot at offering a
competitive product experience with centralized exchanges. Is
Leaving Ethereum The Best Choice For dApps? The fourth iteration of
dYdX will have new features, such as an off-chain order book, and
no trading gas fees. The fee structure will be similar to that of
centralized exchanges. The governance token DYDX will continue to
be the main component of the exchange’s governance model. The
announcement has been celebrated across a portion of the crypto
community, the market seems to have reacted positively. However,
others have expressed concerns as they believe a standalone version
of dYdX will lack security and composability, or design
flexibility. Related Reading | Ethereum (ETH) Market Cap Falls
More Than $124 Billion In Six Weeks Analyst Ryan Watkins said the
following on the dYdX announcement: While I understand the desire
for sovereignty and the need to scale more quickly, I’m not
convinced why an app-chain is the best path forward. Losing
security and composability (as opposed to deploying on Starknet)
with the Ethereum ecosystem seems risky.
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