Decentralized derivatives exchange dYdX is evaluating the transition of its governance token to serve as the native asset of the upcoming dYdX Chain, which is currently in a test phase. 

A decision will be made through a governance vote at a later date, contingent on the community’s decision to bring it to vote, according to the team behind the exchange. Founded in 2018, dYdX is currently the largest decentralized derivatives exchange with trading volume of nearly $600 million over the last 24 hours, according to CoinGecko data.

As the chain gears up for its debut with the release of version 4 later this year, the potential functions of its native asset — which may encompass staking, governance, and rewards — are under evaluation.

Cosmos SDK-based network

The dYdX community will have a significant voice in this decision-making process. Should the decision gain approval through an on-chain vote, the project will transition the token from its current status as an ERC-20 token on Ethereum to its own Cosmos SDK-based network, dYdX developers said.

“If such as election were to materialize, given that DYDX is an Ethereum-based ERC-20 token, the DYDX token would need to be migrated from Ethereum to dYdX Chain,” they added.