The governance system of the dYdX protocol has approved the proposal to migrate to version 4 and accept DYDX as a Layer 1 token for the project's own blockchain.
DYDX Token Approved as Native Token of dYdX Chain
The vote concluded today on the Snapshot platform and received almost 100% community support. The proposal launched by Wintermute received 36 million votes in favor from 392 addresses, while opposition remained minimal with only 43 votes against from four addresses.
In line with management decision, the project is preparing to migrate the DYDX token from Ethereum to a Layer 1 application chain in the Cosmos ecosystem (currently on the testnet).
The proposal also included a plan to develop an Ethereum smart contract that would be overseen by the dYdX Foundation. This contract aims to facilitate the unauthorized transfer of DYDX tokens from the Ethereum network to the new dYdX Chain.
“DYDX is now officially planned to be the base token of the dYdX Chain,” said dYdX founder Antonio Juliano.
What is dYdX?
Founded in 2018, dYdX is pioneering the decentralized derivatives market, particularly in offering continuous trading.
The platform reported trading volume of approximately $240 million in the last 24 hours, with total trading volume exceeding $1 trillion since its launch in 2020.
Known as perpetual contracts, they are a type of futures contract that has no expiration date, making them one of the most preferred types of derivatives in the crypto industry.
In dYdX version 4, every validator on the network will operate an off-chain order book. Buy and sell orders will be sent to the network and then distributed among validators who create blocks containing matching orders using a proof-of-stake consensus mechanism.
*This is not investment advice.