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Jafrin Ahmed
Jun 23, 2022
by Jafrin Ahmed

Crypto Exchange dYdX is Building its Own L1 Blockchain on Cosmos

dYdX Cosmos

Table of contents

  1. dYdX Shifts to Cosmos from Ethereum
  2. Largest Decentralized Exchange
Ethereum-based decentralized exchange dYdX is shifting to Cosmos to build its own blockchain. The new product from dYdX plans to be based on Cosmos, using Tendermint’s proof-of-stake consensus protocol to validate transactions.

dYdX Shifts to Cosmos from Ethereum

According to an official announcement on Wednesday, dYdX, announced plans to build its own L1 chain using the Cosmos SDK, a software development kit used by projects in the Cosmos ecosystem.

"After exploring the landscape of current and upcoming blockchain technologies, we decided that Cosmos would allow us to build the best fully decentralized protocol," the company wrote in its announcement.

DYdX chose Cosmos over other L1 and L2 chains because the blockchain-building framework allows protocols to decide the parameters of their own chain, and therefore to create the tools that they need.

Following the move, dYdX will be able to multiply its processing capacity by ten. It will also require no trading gas fees and instead use a percentage-based trading fee structure similar to centralized exchanges. Meanwhile, fees will accrue to validators and stakers through the DYDX token.

Largest Decentralized Exchange

Founded in 2018, dYdX is currently the largest decentralized derivatives exchange with a trading volume of over $600 million in the last 24 hours, according to data from CoinGecko. The exchange currently operates on StarkEx, an Ethereum Layer 2 scaling network developed by Starkware.

The platform currently leads all Ethereum-based DeFi protocol revenue at $19.7 million over the last 30 days with more than 60,000 unique users over its lifetime.

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Crypto Exchange dYdX is Building its Own L1 Blockchain on Cosmos
Jafrin Ahmed
Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.