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In a governance vote on the decentralized derivatives category leader dYdX (DYDX), the proposal to upgrade the network to version 4 and make DYDX a Layer 1 token for the planned Blockchain received approval. The dYdX governance proposal vote concluded with nearly 100% community support.
Full Community Support for the Proposed Governance
The dYdX derivatives protocol’s governance system approved the transition to version 4 and the adoption of DYDX as a Layer 1 token for the project’s own Blockchain. The vote was concluded on September 4th on the Snapshot platform and received almost 100% support from the community. Wintermute’s governance proposal received 36 million votes in favor from 392 wallet addresses, while only 43 votes in opposition were cast from 4 wallet addresses. Following the governance decision, the project will move the DYDX token to a Layer 1 application Blockchain in the Cosmos ecosystem (currently on the testnet), departing from Ethereum.
The governance proposal also includes a plan to develop an Ethereum smart contract to be audited by the dYdX Foundation. This contract aims to facilitate the unauthorized transfer of DYDX tokens from the Ethereum network to the new dYdX Blockchain. Antonio Juliano, founder of dYdX, stated after the vote, “DYDX is now officially planned to be the base token of the dYdX Blockchain.”
What is dYdX?
Established in 2018, dYdX is a decentralized derivatives exchange that specializes in offering perpetual contracts. The platform has generated approximately $240 million in trading volume in the last 24 hours and has surpassed a total trading volume of $1 trillion since its launch in 2020.
Perpetual contracts, also known as “perpetuals,” are a type of futures contract with no expiration date, making them one of the most preferred derivative types in the cryptocurrency sector.
In dYdX version 4, each validator on the network will operate an off-chain order book. Trading orders will be sent to the network and then distributed among validators who will create blocks containing matched orders using a Proof of Stake (PoS) consensus mechanism.