Decentralized exchange (DEX) platform dYdX is embarking on a new technological adventure by introducing decentralized order books exchange to their platform. The move comes alongside plans to migrate their ecosystem from the Ethereum network to the interchain network Cosmos, a significant shift considering the dominance of Ethereum in the DeFi space.
Speaking at the Korea Blockchain Week 2023, dYdX Foundation CEO Charles d’Haussy shared that the slow performance of on-chain order books has often been a challenge faced by decentralized exchanges. Trading platforms rely heavily on the speed and efficiency of these order books, and slow performance means taking them off-chain to cater to user needs.
Understanding the necessity for fast responses in the high-frequency market of crypto derivatives, the development team at dYdX is making strides towards complete decentralization by reformulating the order book design. However, this does not mean adding the order books on-chain – this solution, through ingenious as it may be, still adds latency issues due to slow in-chain processing speed.
Instead, the alternative proposed by d’Haussy and his team is an innovative blend of decentralization and practical speed requirements, where the order books would be hosted within the validators. This is a break from the traditional role of validators, who are typically confined to the tasks of validating and creating new blocks.
This ambition to offer a “purely decentralized” order book exchange to the market is a bold move, but one that dYdX seems poised to execute confidently. On the shift to the Cosmos network, d’Haussy further clarified that they are not merely expanding – they’re migrating. He reassures their users of a smooth transition, with the major action on their part being the need to connect their MetaMask wallets to the new dYdX chain.
Transition on such a scale is both exciting and precarious, pitting the promise of advancing decentralization against the familiarity and proven functionality of the current Ethereum-based structure. Performance, security, speed – these will all be factors under the microscope as dYdX embarks on this journey of altering the heart of its operational structure. As enthusiastic onlookers, let’s hope for a pioneering success story in the relentless pursuit of decentralizing our digital world.
Source: Cointelegraph
