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In today’s newsletter, we’ll cover dYdX. If you have more thoughts, make sure to write a review for dYdX on Smoothie and share it with your network.
Matt & Vineet
dYdX is currently the leader in perpetual contracts (perps) by most trading metrics.
However, dYdX is in a critical transition period, shifting its foundation from StarkEx to its own Cosmos chain while introducing new capabilities.
We’ll aim to break down the components that make dYdX a significant player and what the future holds for this ambitious project.
Current Status: dYdX Version 3
- Chains: Currently operating on StarkEx-specific L2, dYdX will soon transition to its native chain (L1) using Cosmos SDK.
- Supported Assets: The platform supports a healthy list of 37 assets.
- Oracle: Chainlink serves as the oracle solution.
- Fee Structure: dYdX adopts a centralized exchange (CEX)-like fee structure, with fees ranging based on trading volume and additional fee rebates in $dYdX tokens.
The platform utilizes an orderbook model, a blend of centralized and decentralized elements, to provide an optimized trading experience.
Here, users initiate on-chain orders that are subsequently matched with off-chain order books.
This architecture mitigates the risks of frontrunning while ensuring rapid balance updates.
What's noteworthy is how the model attracts market makers, thereby providing significant liquidity and boosting trade volumes.
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The Future: dYdX Version 4
- Upcoming Features: Gasless trading, greater throughput, and more yield sources for $dYdX token holders.
- Mobile App Availability: iOS and Android apps are in the pipeline.
The next iteration, known as dYdX v4, is in its private testnet phase.
Public testnet release is planned for July, with the mainnet expected in September.
One of the most captivating aspects of v4 is that it will operate on its own Layer 1 (L1), built on the Cosmos SDK.
With their own validators run orderbooks offchain.
This move will provide dYdX with unprecedented control over its infrastructure, from fee structures to validator networks.
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- The launch of v4 promises to be a game-changer, providing enhanced features that cater to both retail and institutional users.
- Trading on dYdX is fast, cheap, and user-friendly, reducing the friction often associated with decentralized trading.
- The migration to v4 could entail a range of difficulties and unforeseen challenges.
- Upcoming token unlocks for private investors and the team in December could introduce volatility in $dYdX's market value.
Write your review for dYdX on Smoothie.
dYdX placed 2nd in Smoothie Awards with 557 votes.
dYdX has positioned itself as a robust platform for traders seeking minimal fees and a seamless bridge from the Ethereum mainnet.
With the upcoming transition to its v4 architecture, the DEX is likely to fortify its market position, assuming the execution matches the vision.
However, token holders should brace themselves for potential volatility towards the end of the year, as the platform undergoes major shifts in both technology and tokenomics.
Write your own review for dYdX on Smoothie.
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