Black_background_logo_BitcoinWorld-removebg-preview
Blockchain News

dYdX Reveals Launch Date for Move From Ethereum to Cosmos

This Tuesday, dYdX announced the launch of its V4 private testnet, a significant step that will see the decentralized exchange (DEX) leave Ethereum. The platform will be fully operational on Cosmos by the end of September.

The network enables developer teams to create their own native blockchains based on their preferences by utilizing the Cosmos Software Development Kit (SDK). Despite their differences, each independent Cosmos-based blockchain can communicate with one another.

In addition to decentralized spot trading, dYdX allows traders to trade assets on margin. The dYdX private testnet will go live on Tuesday and will last two to three weeks. Following that, by the end of July, a public testnet will be launched. The platform cited Ethereum’s lack of scalability as the primary reason for the move. “We reached a point where Ethereum couldn’t process the transactions fast enough,” said Nathan Cha, marketing lead at dYdX, at this year’s Paris Blockchain Week.

This is the second project to declare its switch from Ethereum to Cosmos. SushiSwap is following suit after acquiring the Cosmos-based trading platform Vortex Protocol last month.

The teams looked into several options, including Solana and layer-2 solutions. “”We decided that Cosmos was the better option because we can customize the blockchain to our needs,” Cha explained. “We can now handle transactions at a faster rate.”

dYdX, founded in 2017 by Antonio Juliano, a software engineer who previously worked at Coinbase and Uber, has approximately $341.5 million in total value locked (TVL), according to DeFi Llama. TVL is a metric used to determine how much money is circulating in a given DeFi protocol. Lido Finance, a liquid staking protocol, currently has the highest TVL at $10.4 billion.

Despite the fact that decentralized exchanges such as Uniswap, Curve, and dYdX are rapidly growing, they still account for a small proportion of transactions when compared to their centralized counterparts. Over the last day, Uniswap has processed more than $642 million in orders. During the same time period, Binance processed more than $4.28 billion in trades.

The collapse of FTX last November did not significantly alter this proportion, contrary to expectations at the time.

“After FTX, we saw a 20-30% increase in trading volume, but only for a short time,” dYdX Foundation Vice President David Gogel told Decrypt. “Other centralized exchanges are the companies that benefited the most from the FTX case. People are unaware of self-custody, and there is still much work to be done to educate them. It’s a difficult journey.”

 

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.