Decentralized exchange dYdX has announced plans to create a standalone blockchain, according to Ethereum Layer-2 protocol details shared on Wednesday.
dYdX, one of the largest crypto derivatives platforms in the market today, has announced plans to build the new chain based on the Cosmos SDK (software development toolkit).
For transaction processing, the dYdX V4 will use the Tendermint proof-of-stake (PoS) consensus protocol.
A “fully decentralized order book” and higher throughput
“dYdX V4 will feature a fully decentralized, off-chain order book and matching engine capable of scaling orders of magnitude greater than any blockchain can support,“noted the platform in a blog post.
While the dYdX team plans to take the DEX protocol to one of the biggest crypto exchanges, they recognize the enormity of this ambition and how difficult it could be. However, led by co-founder Antonio Juliano, they are confident of success.
“Developing a decentralized off-chain order book and moving from Ethereum to a dYdX-specific chain as a major DeFi protocol has not been tested, but we believe it gives dYdX the best chance to deliver a competitive product experience. with centralized exchanges.“, the team said in a Twitter feed.
dYdX V4 will have an on-chain native Layer1 token, although the team says they have not opted for the DYDX token as the community will need to have a say in this.
The $DYDX the token would seem like a natural fit to be used as a V4 network layer 1 token, but we’re looking forward to hearing from the dYdX community
— dYdX (@dYdX) June 22, 2022
According to the platform, the plan is to build dYdX and open it as open source by the end of 2022.