Derivatives exchange dYdX to become '100% decentralized by EOY'
Ethereum Layer 2-based crypto derivatives trading platform dYdX has vowed to become “100% decentralized by EOY” via the protocol's V4 update.
dYdX primarily offers perpetual contracts, which are derivatives products that borrow elements from both spot margin trading and futures trading but do not have an expiry date.
At present only certain components of dYdX are decentralized, including its Ethereum smart contracts, governance and staking. However its “orderbook and matching engine” are managed by dYdX Trading Inc. — the team that developed the platform.
dYdX announced the V4 update on Twitter yesterday with a new roadmap outlining that: “You are not ready.”
#DYDX will be 100% decentralized by EOY. You are not ready.https://t.co/0StvepVlgb
In a blog dYdX explained that the “primary aspect” of fully decentralizing the platform is focused on the orderbook and its matching engine. The team noted that the main challenges will be scaling throughput (transaction processing power), finality (off-chain trade matching) and fairness (operators not being able to extract value from legitimate trading activity) in a decentralized manner.
“With V4, dYdX will become fully decentralized. There will no longer be central points of control or failure of the protocol; all aspects of the protocol that can be controlled will be fully controlled by the community,” the roadmap reads.
Outlining why the platform is going fully decentralized, dYdX emphasized the “fundamental improvement” that decentralized finance (DeFi) provides over centralized financial services:
The V4 update will see dYdX Trading Inc. receive zero trading fees moving forward. Additionally, the platform will also roll out more products and services, such as synthetics and spot
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