dYdX to expand to its own blockchain in the Cosmos ecosystem

Quick Take

  • dYdX, a popular derivatives exchange, will develop a new blockchain on the Cosmos network and expand to it.
  • The exchange hasn’t decided what will happen to the current version on StarkEx.

dYdX, a popular crypto derivatives exchange, has unveiled a major plan to expand to its own Cosmos-based blockchain as part of the dYdX V4 update. This decision marks an expansion beyond the Ethereum ecosystem. 

Founded in 2018, dYdX is currently the largest decentralized derivatives exchange with a trading volume of over $600 million in the last 24 hours, per CoinGecko data. The exchange currently operates on StarkEx, an Ethereum Layer 2 scaling network developed by Starkware.

In a Wednesday announcement, dYdX Trading, the development team behind dYdX, announced plans to spin up its own chain using the Cosmos SDK. This is a software development kit used by projects in the Cosmos ecosystem.

"Developing a decentralized, off-chain order book and matching engine and moving from Ethereum to a dYdX-specific chain as a major DeFi 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,” said dYdX founder Antonio Juliano. 

dYdX's new chain will help make the project more decentralized and be controlled by a distributed set of validators, rather than the founding team alone, the announcement stated. It is expected to launch in the coming months, Juliano added.

When asked about plans for dYdX's existing version on StarkEx, a spokesperson from dYdX told The Block that it's hasn't made a decision yet. “We are still considering what will happen with the existing V3 system built on Starkware,” the spokesperson said.

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