Understand the nature and advantages of dYdX Chain

dYdX, one of the most influential decentralized exchanges, uses its own layer 2 convolutions for higher throughput and lower minimum order sizes. According to the development route plan, dYdX launched the V4 product, which involves a new blockchain called dYdXChain. According to current data analysis, this current dYdX Chain has become a rising star, but what kind of chain is this dYdXChain? There are still people who don’t know. Simply put, dYdXChain is a blockchain built based on CosmosSDK and utilizing Tendermint consensus. The editor below will give you a comprehensive introduction to dYdX Chain.

#What is dYdX Chain?

dYdX Chain is built based on Cosmos SDK and TendermintPoS consensus protocol. This choice was made to support dYdX’s efforts towards complete decentralization and provide customizability for the new blockchain.

dYdX Chain is a fully decentralized platform that provides order books and matching engines. It can handle up to 2,000 transactions per second to meet the specific needs of various projects. On dYdX Chain, transaction fees will be denominated in USDC and DYDX.

dYdX Chain’s security incentives do not rely on token inflation. Instead, the chain distributes rewards by charging validators and stakers fees.

What are the advantages of dYdX Chain?

The advantages of dYdX Chain mainly lie in three aspects: high throughput, bridging and customizability. The following is a detailed introduction:

1. High throughput

Verification of each dYdXChain All servers maintain an in-memory order book that does not require consensus (i.e. off-chain). Order placing and order cancellation operations will be propagated through the network, similar to traditional blockchain transactions, and eventually the order book stored by each validator will be agreed upon. Orders are matched across the network in real time, and the resulting transactions are submitted to the chain on each block. dYdXChain is able to handle a large number of orders and has extremely high order throughput while maintaining decentralization.

2. Bridging

dYdX Chain deploys a bridging user interface that allows anyone to bridge their DYDX tokens from Ethereum to the dYdX Chain. By providing a simplified token exchange process, dYdXChain encourages more ethDYDX holders to exchange their tokens for DYDX, allowing them to better participate in the dYdX ecosystem. In addition, seamless token swaps are also a key step to facilitate staking, which will be implemented at a later stage.

3. Customizability

The dYdX chain is built on Cosmos and benefits from complete customizability in terms of blockchain functions and validator tasks. It is an independent blockchain that can be fine-tuned for specific purposes. This gives builders the freedom to customize every aspect from the underlying protocol to the user interface.

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