dYdX Readies for v4 with Code Open-Sourcing and Blockchain Transition

dYdX Readies for v4 with Code Open-Sourcing and Blockchain Transition

By: Eliza Bennet

Decentralized exchange dYdX, currently with a Total Value Locked (TVL) of over $353 million, is getting ready for a significant transition. The team is open-sourcing its code, a common practice in the blockchain space that helps increase trust, security, and decentralization among the community. This effort comes as dYdX prepares for its fourth update, v4, where it plans to operate on its blockchain.

Currently a layer-2 exchange relying on the Ethereum network for its security, dYdX intends to migrate to a standalone blockchain built with the Cosmos Software Development Kit (SDK), named dYdX Chain. The Tendermint proof-of-stake consensus algorithm will power the new network, offering more security and scalability.

In related news, dYdX Trading Inc, the exchange developer, is updating its structure to become a Public Benefit Corporation. Although it will remain for-profit, the company will also focus on 'public benefits.' The approval and transition to v4 are subject to the community's vote.

The v4 upgrade aims to introduce an off-chain order book and a scalable matching engine to process more transactions. The development team believes these improvements will significantly enhance the protocol, offering drastic improvements to the trading experience. Following the update, the protocol might support new asset classes including equities, commodities, and real estate. The native dYdX token is trading at high levels ahead of the transition due to the strong bullish momentum.

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