dYdX Prepares to Launch V4 and Transition to dYdX Chain
dYdX, a decentralized exchange platform (DEX), is about to reach a crucial milestone with the imminent launch of its V4. This major upgrade marks a significant transition: dYdX will move from being a layer 2 solution on Ethereum to its own standalone blockchain built on Cosmos, now known as ‘dYdX Chain’.
This change is even more remarkable as V4 will be fully open-source, decentralized, and community-governed. It encompasses all aspects of the protocol, including the order book and front-end. This ‘total’ decentralization means that ‘dYdX Trading Inc.’, the company behind the exchange, will no longer control the protocol or receive transaction fees.
Furthermore, making their code open-source will make the protocol more transparent, allowing developers and users to detect potential bugs and improve its overall quality. Once V4 is live, most decisions will be made through governance votes.
As for its decentralized order book, which was one of the biggest challenges in V4, dYdX claims that it is now managed by the protocol’s validators.
A Small Step for Man, a Huge Step for the DeFi Ecosystem
The V4 of dYdX represents a true revolution in the world of decentralized finance (DeFi). Antonio Juliano, the founder and CEO of dYdX, emphasized the importance of this milestone, stating that the launch of V4 ‘is a huge moment for dYdX and DeFi. […] dYdX Chain marks the complete decentralization of dYdX and is an important step in our mission to democratize access to financial opportunities.’
Currently, dYdX has a total value locked (TVL) of approximately $364 million, with its token’s market capitalization reaching $404 million. However, the introduction of V4 could catalyze even greater growth for dYdX. By making its protocol fully decentralized and open-source, dYdX could attract a larger number of users and developers.
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