The dYdX community has voted to approve the Beta Stage of the newly launched Cosmos blockchain. A dedicated network for hosting onchain perps, dYdX Chain only went live on October 26. Initially, it operated in Alpha, with orders set to post-only. The Beta brings live trading, allowing users to experience dYdX in its new, scalable onchain environment. 

dYdX Chain Opens for Business

With more than 33 perps markets now live, dYdX Chain is very much open for business. There are a few caveats however. Because it’s still in Beta, there are still improvements to make in terms of stability and interface quality. Moreover, there will be no trading rewards to be distributed throughout the Beta stage, but validators and stakers will still accumulate trading fees.

More efficient fee distribution to network contributors is one of many benefits that the new dYdX playground in the form of a dedicated blockchain brings to bear. It’s streets ahead of Ethereum, where dYdX protocol was formerly housed, in terms of speed, throughput, and cost. There is, however, still the task of getting stakers to move their DYDX tokens from Ethereum to dYdX Chain. 

A bridge portal for token migration has been created that allows users to deposit DYDX into the smart contract on Ethereum. They will then be issued wethDYDX tokens on dYdX Chain. The process will take over 38 hours to complete due to the number of onchain verifications needed at this time. Once completed, users will be free to stake their DYDX on the native chain and to earn a share of trading fees.

dYdX Enters the Cosmos

dYdX Chain is built on Cosmos and uses CometBFT for consensus. It’s arguably the largest protocol yet to migrate to the Cosmos ecosystem and certainly one of the most important for onchain perps. The original dYdX exchange launched in 2019 and quickly found favor with traders who wanted easy access to leveraged crypto markets. Soon the exchange was doing $1M of volume a day – not bad at a time when DEX trading was just getting started.

As dYdX grew and Ethereum network usage increased, it became clear that the two would need to diverge, with dYdX moving to architecture better suited to hosting high frequency trading. It’s taken significant time and development to create dYdX Chain, with each new phase of the blockchain’s evolution requiring community consensus using a DAO governance model.

Now that it is in Beta, further testing of dYdX Chain will be undertaken in a live environment to ensure that the network is performing optimally. At the same time, this will give traders a chance to experience the new front-end and responsive base layer for themselves. The most obvious benefit is the reduced fees dYdX Chain provides, but there are also security improvements that, while hard to discern from a user perspective, are just as vital.

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