dYdX

dYdX is a decentralised finance (DeFi) platform that offers advanced trading features, including decentralised margin trading and derivatives. It was one of the first platforms to introduce flash loans and decentralised exchange (DEX) aggregators in 2018. Built on a custom Layer-1 blockchain using the Cosmos SDK, dYdX provides a fully decentralised trading experience with high leverage, deep liquidity, and low fees. The platform is governed by its community through the DYDX token, aiming to deliver a transparent and user-driven financial system.

dYdX enables users to engage in perpetual contract trading with high leverage, allowing speculation on cryptocurrency price movements without expiration dates. Operating under a non-custodial model, it ensures users maintain full control over their assets. In November 2024, dYdX launched "dYdX Unlimited," introducing features such as instant market listings, the MegaVault liquidity engine, revamped trading rewards, and lifetime affiliate commissions, setting a new standard for decentralised trading.

The migration to the dYdX Chain marked a significant evolution for the DYDX token. Initially serving as a governance token on the Ethereum-based dYdX platform (dYdX v3), DYDX has become the native token of a standalone proof-of-stake blockchain network. This transition broadens its functionalities to include staking for network security and active participation in governance.

Key highlights of the migration and expanded utility include:

• dYdX Chain Adoption: The dYdX community voted to adopt DYDX as the Layer 1 token of the dYdX Chain, transitioning from ethDYDX to a broader role in the new network.
• Fee Distribution: On the dYdX Chain, all collected fees (trading and gas fees) are distributed to Validators and Stakers, aligning incentives for network security and participation.
• Gas-less Trading: Trading on the dYdX Chain does not incur gas fees for transactions; only maker and taker trading fees in USDC apply.
• Genesis Event: The first block of the dYdX Chain was created by Genesis Validators, marking the official launch of the network and the beginning of DYDX's new functionalities within this ecosystem.

This evolution from a governance token to a Layer 1 protocol token underscores the dYdX community's commitment to creating a decentralised and secure platform for advanced trading in the crypto market. The dYdX Chain, built using the Cosmos SDK and leveraging CometBFT for consensus, represents a significant step towards a decentralised financial system where the community plays a pivotal role in shaping the network's future.