The dYdX trading platform will develop its blockchain on Cosmos (ATOM)

dYdX will join the Cosmos ecosystem (ATOM)

The decentralized trading platform dYdX presented its V4 and it will be built on the Cosmos ecosystem. The team hopes that this version will be available for the end of this yearbut such an ambitious project could however experience some additional delays.

Indeed, with this change, dYdX will use the Cosmos SDK and the Tendermint consensus for become a full-fledged blockchain. The Cosmos SDK is a kind of “construction kit” for developers. Tendermint, on the other hand, is a Proof-of-Stake (PoS) consensus, able to function normally, even if a third of the validators did not play their part.

With this total overhaul of its engine, dYdX aims to become one of the trading platforms the most used in the world. Although this involves many challenges to overcome, the project team embraces this vision:

“We realize this is an extremely difficult and ambitious goal, but believe that dYdX should make choices to maximize the chances of achieving this goal, rather than settling for a lower definition of success. »

Furthermore, placing or canceling orders on the protocol will not imply no transaction fees. Only trading as such will cost a small proportion of fees, like all platforms. For this it is the DYDX token that will be used to be redistributed to validators, who will use it to secure network nodes.

👉 To go further – Find all of our guides on trading

A choice motivated by scalability and decentralization

dYdX currently runs on the Ethereum (ETH) blockchain, thanks to a layer 2 solution from StarkWare. This is what currently allows the protocol to not apply transaction fees, but this solution includes capacity limits.

At the moment, the platform processes around 10 transactions per second and 1,000 orders and cancellations in the same time frame. But dYdX does not wish to limit itself to its values ​​and intends to provide a tool institutional quality.

In addition, she wants to provide a solution totally open source to its community and this notion is not fully possible with StarkWare technology. As this Twitter user points out, therefore, this necessarily implies dependence on a trusted third party :

This state of affairs therefore consists of a focal point. However, dYdX wants to become a fully decentralized protocol, as the team pointed out in its announcement:

“The main requirement for the V4 protocol is complete decentralization. The decentralization of a system is equal to the decentralization of its least decentralized component. This means that every part of V4 should be decentralized while still performing well. »

Remember that the core business of the platform is trading futures contracts. Such a decentralized operating investment vehicle may have a promising future ahead of it, when regulation prevents this for centralized platforms.

If the work to be provided is substantial for dYdX to achieve its objectives, their ambition still promises great prospects for the future of the platform.

👉 Also in the news – Bybit: $8 million to be won with the World Series Of Trading (WSOT)

Sources: dYdX, How Tendermint works

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About the Author : Vincent Mayor


I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
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