dYdX, the popular decentralized exchange on Ethereum, has announced plans to build a private blockchain on the Cosmos platform and launch it soon in the coming months.
Launched in 2018, dYdX is currently the largest decentralized derivatives exchange on Ethereum with 24-hour volume reaching over $600 million, according to CoinGecko. The exchange currently operates on StarkEx, a layer-2 scaling solution for Ethereum, developed by StarkWare.
According to a new development strategy called dYdX V4, the exchange wishes to create its own blockchain through the Cosmos SDK, a programming toolkit for projects in the Cosmos ecosystem.
Founder Antonio Juliano commented:
“Developing a decentralized, off-chain order book and matching engine and moving from Ethereum to a dYdX-specific chain as a major protocol is very much untested, but we believe it gives the dYdX ecosystem the best shot at having a network that could offer a long-term competitive product experience with centralized exchanges.”
The DEX believes that having its own blockchain will also help make the project more decentralized, in line with the goal of full decentralization by the end of 2022. The blockchain on Cosmos will be managed by a group of validators, and not necessarily must be maintained by the project itself.
When asked about the exchange’s intentions with the current version on StarkEx, a dYdX spokesperson revealed that the exchange team has not yet come to a decision on whether to maintain the two platforms in parallel or choose Cosmos over Ethereum.
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