Decentralized exchange (DEX) platform dYdX plans to offer a “purely decentralized” order book exchange as it migrates its ecosystem from the Ethereum network to the interchain network Cosmos.
At the Korea Blockchain Week 2023, Cointelegraph’s Andrew Fenton spoke with dYdX Foundation CEO Charles d’Haussy about the DEX’s plans to implement decentralized order books on the exchange and how it plans to shift its ecosystem to a new blockchain network.
In the interview, d’Haussy told Cointelegraph that one of the issues faced by DEXs is the slow performance of on-chain order books. Because of this issue, order books for DEXs had to be taken off-chain to cater to the needs of the users. He explained:
“If you have like a one-second block time, you still have a one-second latency. And the market of crypto derivatives is a very high-frequency market. So, you cannot offer one-second latency.”
D’Haussy highlighted that dYdX is taking a “new step forward” in decentralization by making the order book decentralized. According to the executive, the order book will not be on the dYdX chain because it will still be slow, but it will instead be hosted within the validators.
“So, the architecture choice by dYdX engineers is to decentralize the order book, without adding it on-chain because it will be too slow. The decision was made to essentially host the order book within the memory of the validators,” d’Haussy added.
D’Haussy believes this method is a “new thing within the space.” The executive explained that validators usually validate blocks and create new blocks with a set of transactions. He also said the validators will still do this on the dYdX chain but will also store order books in their memory. “And that’s one solution, which we’ll use to essentially offer to the market a purely decentralized order book exchange,” he explained.
Related: 40% of crypto trading platforms are decentralized: World Federation of Exchanges
Apart from the decentralized order book, d’Haussy spoke about dYdX’s move to Cosmos. “DYdX is not expanding, dYdX is migrating. So, the Ethereum exchange will close within a few months […] we are migrating the full ecosystem,” he explained.
️ v4 Adoption & DYDX Token Migration
The dYdX community has voted in support of v4 Adoption and a potential DYDX Token Migration❗
✅ ~36M DYDX from 392 addresses❌ ~43 DYDX from 4 addresseshttps://t.co/FBLMZATURn pic.twitter.com/RwyOaDwpe4
— dYdX Foundation (@dydxfoundation) September 3, 2023
According to d’Haussy, users will barely notice the change, which will be very smooth. Users will only need to connect their MetaMask wallets to the new dYdX chain, adding that dydx will “take care of all the heavy lifting.”
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