Cryptocurrency exchange dYdX has made significant progress towards achieving full decentralization with the launch of its public testnet for version 4. This latest development brings the exchange one step closer to the future mainnet launch of its v4 iteration.
dYdX, which operates on the Ethereum and StarkEx networks, has positioned itself as a decentralized exchange (DEX) by not holding custody of users’ funds. However, the previous versions still relied on a centralized order book and matching engine. In contrast, version 4 is set to eliminate these centralized components, making the exchange truly decentralized without relying on an automated market maker.
The protocol’s documentation reveals that version 4 will achieve this by running parts of the app on a separate dYdX network with independent validators. This approach allows the order book to be stored on-chain, ensuring transparency and security.
As of July 5, users can request testnet funds to explore the app’s functionalities, such as virtual trades, profit and loss tracking, and other basic features. While the ability to bridge between networks is not yet available, it is expected to be introduced during the public testnet phase.
Following the successful completion of the testnet phase, the development team plans to integrate stablecoins into dYdX and support Cosmos Inter-Blockchain Communication. This integration will grant Cosmos users access to the dYdX app. The launch of version 4 will follow the completion of this final milestone.
In previous news, dYdX announced its decision to cease operations in Canada due to regulatory challenges. Additionally, the exchange faced criticism from privacy advocates in September 2022 when it offered a $25 bonus to new users, subject to proving they were not bots. However, the promotion was later discontinued.
With the launch of the v4 testnet, dYdX is demonstrating its commitment to innovation and decentralization within the cryptocurrency space. Users and industry observers eagerly await the mainnet release, which promises to provide a fully decentralized trading experience on the dYdX exchange.