Introduction

dYdX stands as an decentralized platform for digital asset derivatives trading, offering users the liberty to engage in permissionless transactions involving perpetual futures linked to 36 diverse digital assets, all while maintaining minimal trading costs and the potential to employ leverage.

The decentralized exchange (DEX) has undergone substantial advancements since its inception as a basic margin trading platform back in 2017. These notable transformations encompass the development of an in-house order book system, the incorporation of perpetual futures, and multiple adjustments to the underlying protocol's framework. Initially established on Ethereum Layer 1, dYdX transitioned to a Starkware Layer 2 and is presently in the process of migrating to its distinct Cosmos app-chain, V4.

dYdX v4

The latest iteration of dYdX, the dYdX Chain, has recently gone live as its fourth version. This significant development, powered by the Cosmos SDK, adds a noteworthy contribution to the Cosmos ecosystem, marking a pivotal moment in the world of DeFi.

Finoa Consensus Services proudly stands as a genesis validator for dYdX v4, overseeing the distinctive off-chain, in-memory order book trading system within the network. With the introduction of dYdX v4, the platform has evolved into a standalone chain within the Cosmos ecosystem. By adopting the Cosmos SDK, dYdX embraces enhanced decentralization, scalability, and customization.

Why decide on a dedicated app-chain?

In its early days, dYdX operated as an Ethereum Layer 1 application, but encountered challenges, particularly in terms of scalability and high gas fees. In response, they transitioned to an Ethereum-based Layer 2 solution, successfully mitigating the fee issue but introducing certain elements of centralization. Now, with the advent of v4, dYdX has unveiled an entirely open-sourced, off-chain order book designed for seamless scalability. By aligning with the Cosmos ecosystem, dYdX positions itself to harness the full spectrum of decentralization, customization, and scalability.

Acquiring and utilizing dYdX v4 Tokens

The dYdX v4 token, referred to as DYDX, fulfills a range of essential roles. Primarily, it empowers users to actively engage in governance initiatives and also fortify the network's operational integrity and security through staking their dYdX v4 tokens, resulting in the accrual of rewards for their contributions.

Nonetheless, in order to effectively employ and stake dYdX v4 tokens, the dYdX Chain must facilitate the onboarding of users from diverse platforms, including rollups, Ethereum L1, other application chains, and centralized exchanges, into its Cosmos-based iteration. Investors that already have DYDX tokens on V4, can read our staking guide here. 

Details on staking DYDX with Finoa Consensus Services

*Note that since DYDX inflation benefits traders, dYdX stakers will receive 100% of the trading fees paid out in USDC. If you're interested in initiating the staking process for DYDX with Finoa Consensus Services, please don't hesitate to contact us at sales@finoa.io for further guidance.

A unique compliant and institutional-first setup

Finoa and Finoa Consensus Services (FCS) is a unique combination providing institutional investors with regulatory certainty from Finoa and a regulatory hedge in the future with FCS, affiliated with the regulated business, and one of few staking companies set up in Germany to ensure future prosperity and compliance with European- and global standards.