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DYDX Token Receives Full Community Support for dYdX Chain Integration

Ruholamin Haqshanas
Last updated: | 2 min read
Image Source: dydx

Popular decentralized exchange dydx has received unanimous approval from its community to transition to version 4 and adopt the DYDX token as the Layer 1 token for its upcoming blockchain. 

The vote, which took place on the Snapshot platform and concluded on September 4, garnered almost 100% support from the community.

Initiated by Wintermute, the proposal received an astounding 36 million votes in favor from 392 addresses, with only 43 votes in opposition from four addresses. 

This overwhelming community backing paves the way for the migration of the DYDX token from Ethereum (ETH) to a Layer 1 appchain within the Cosmos ecosystem, which is currently on the testnet.

The proposal also included the development of an Ethereum smart contract overseen by the dYdX Foundation. 

This contract aims to enable the seamless 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,” announced dYdX founder Antonio Juliano.

Launched in 2018, dYdX is a leading decentralized derivatives market specializing in perpetual trading. 

With nearly $240 million in trading volume in the last 24 hours and a total trading volume surpassing $1 trillion since its launch in 2020, the platform continues to be at the forefront of the decentralized derivatives market.

Perpetual contracts, also known as “perpetuals,” are futures contracts without an expiration date, making them highly popular in the cryptocurrency industry. 

In the upcoming dYdX version 4, every validator on the network will operate an offchain orderbook. 

Trading orders will be sent to the network and distributed among validators, who will then generate blocks containing matched orders using a proof-of-stake consensus mechanism.

DeFi Platforms Take the Spotlight as Interest in CeFi Wanes

Since the recent crypto meltdown, there has been a shift in investment patterns, with venture capitalists reallocating funds from CeFi projects to invest in the growing DeFi sector. 

A March report from CoinGecko highlighted that digital asset investment firms invested $2.7 billion in DeFi projects in 2022, marking a 190% increase compared to 2021.

In contrast, investments in CeFi projects decreased by 73% to $4.3 billion during the same period. 

The report suggests that DeFi is emerging as the new high-growth area in the crypto industry, while CeFi may have reached a saturation point.

As reported, Binance CEO Changpeng Zhao has also predicted that DeFi can outshine CeFi during the upcoming bull run. 

During a recent AMA, the crypto boss expressed his belief that DeFi has the potential to surpass CeFi in terms of trading volumes. 

“I think the more decentralized the industry becomes, the better,” Zhao said, suggesting that it may not be long before DeFi overtakes CeFi trading volumes, as it currently stands at around 5% to 10% of CeFi volumes.