Decentralized cryptocurrency exchange dYdX has officially launched its layer-1 blockchain, featuring the creation of its genesis block. This blockchain operates using native DYDX tokens and has key features that set it apart:
- Fee Distribution: The dYdX Chain distributes all fees to validators and stakers in USD Coin (USDC), which includes trading fees denominated in USDC and gas fees for transactions denominated in DYDX or USDC.
- Blockchain Network: It’s built on a proof-of-stake (PoS) blockchain network, leveraging Cosmos’ software development kit and employing CometBFT as its consensus protocol. Validators secure the network by staking DYDX tokens and overseeing the governance operations.
- Launch Timing: The successful launch of dYdX’s native layer-1 chain was dependent on industry giants such as Circle and Coinbase launching on Cosmos in time for the creation of its genesis block. dYdX founder Antonio Juliano described it as an “entirely new blockchain built on Cosmos SDK” and the “first-ever decentralized, off-chain orderbook.” The blockchain is open-source.
- Transition from Ethereum: Prior to the layer-1 chain, DYDX was an ERC-20 token operating on dYdX’s original Ethereum layer-2 protocol. The transition included adopting DYDX as the L1 token of the dYdX Chain, establishing a one-way bridge from Ethereum to the dYdX Chain, and granting wrapped Ethereum DYDX (wethDYDX) the same governance utility as ethDYDX in dYdX v3.
- Governance: Stakers and validators on the dYdX Chain secure and protect the network while receiving dYdX protocol fees in proportion to their staked assets. These fees are distributed to validators and stakers through the Cosmos distribution module. Governance on the dYdX Chain aims to be more accessible, allowing any holder to create a governance proposal, with provisions in place to combat spam proposals.
Chain validators may inherit the voting weight of stakers unless specific stakers choose to vote on proposals individually.
This launch marks an important step for dYdX in enhancing the platform’s capabilities, extending governance utility for DYDX tokens, and strengthening its decentralized infrastructure.