dYdX
dYdX is the current largest decentralised derivatives exchange. It allows users to trade perpetual contracts in a decentralized manner and aims to be the exchange for all derivatives in the future. Perpetual contracts (or perps) are the most traded product in crypto with over $1bn daily trading volume on dYdX alone.
Corey Miller
Corey Miller has been the growth lead at dYdX for the past 2 years. He previously worked at a Crypto hedge fund and VC fund.
Podcast Summary / Notes
Why is dYdX moving from Ethereum to Cosmos?
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Currently built on Starkware (L2) (ZK proof system)
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Starkware is pretty good - Zero gas cost
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dYdX Goal is to build a fully decentralised exchange
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Currently not fully decentralised on ETH - Matching engine and order book
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Building own L1 on Cosmos gives dYdX validators the most flexibility
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Why Cosmos SDK and not other alternatives i.e. AVAX subnet?
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All of the different options have different pros and cons
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Having our own chain and the ability for customization and upgrades gives more control in the hands of the dYdX community
Potential risks or downside you foresee with this migration?
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Risks
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Product experience not very good
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Users don’t trust the security of v4
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Not enough liquidity to satisfy needs
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Confident that they will be able to deal with risks
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Goal: Build an experience that parallels web2 as users care about the product, not the underlying chain
Will dYdX run 2 apps at once concurrently?
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v3 and v4 will be running in parallel for some time
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v3 users will likely have to wind down positions after some time
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Is this migration a bet on the Cosmos ecosystem?
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dYdX is more product-focused, not maximalist
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Not a bet on Cosmos ecosystem, but more a bet on building their own dApp chain.
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It may have IBC capability, but interoperability is not the focal point
Why migrate now?
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Nothing to do with the bear market
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Something they’ve been thinking and researching about for a while
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Is there a timeline?
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Release open source by EOY
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Q1/Q2 2023 fully live
What do you think the industry will look like? Will everyone move to decentralisation?
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Hard to predict specifically in advance
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Decentralization allows everyone to access your application and product
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The world will likely look more favourably on decentralized applications
Biggest challenge for dYdX?
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Bridging (people to port over from v3 to v4)
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Liquidity (getting the largest market makers in crypto)
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Finding a way for the DAO to scale and be better operated
Any liquidity incentives/ airdrops?
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Possibility of ongoing liquidity mining incentives on v3 be transferred over to v4
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Token holders will have to think about and decide on
Jun Sheng is a research intern and is an avid gamer, degen, memer, sleeper. Follow the author on Twitter @jnshngl
