In a significant development, decentralized cryptocurrency exchange dYdX has unveiled its layer-1 blockchain, marking a new chapter in its operational framework. The genesis block of this blockchain has been created, with the ecosystem set to be powered by native DYDX tokens.
The newly launched dYdX Chain is designed to allocate all incurred fees to network validators and stakers in USD Coin (USDC), encompassing trading fees and gas fees for transactions denominated in either DYDX or USDC. This novel blockchain is crafted using the Cosmos software development kit, employing CometBFT as its consensus protocol. Validators, by staking DYDX tokens, will bolster the blockchain’s security and engage in the network’s governance activities.
This transition signifies a monumental evolution for dYdX, migrating to a standalone Cosmos-based blockchain from its prior reliance on Ethereum’s Layer 2 protocol. The move towards an independent blockchain was catalyzed by the need for a more accessible governance framework and enhanced network security, aligning with similar transitions in the broader blockchain space, like Ethereum’s shift to a proof-of-stake model.
dYdX’s founder, Antonio Juliano, underscored the crucial role of prominent blockchain platforms Circle and Coinbase in ensuring a timely launch of the dYdX Chain. The new blockchain, described as an “entirely new blockchain built on Cosmos SDK” by Juliano, is also touted as the “first-ever decentralized, off-chain orderbook” which is entirely open-source. The launch of this layer-1 blockchain follows the community’s endorsement to adopt DYDX as the L1 token of the dYdX Chain, enabling a seamless transition from its original Ethereum layer-2 protocol, and expanding the utility of DYDX tokens for staking, network security, and governance on the new chain.
Through this initiative, dYdX aims to augment its governance model, making it more inclusive by allowing any holder to create governance proposals with a deposit, a shift from the previous ‘Proposing Power’ concept in dYdX v3. This is expected to foster a more democratic and engaging governance ecosystem, elevating the platform’s capacity to evolve and adapt to the dynamic needs of its community.
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