New dYdX v4 reaches community vote stage

On-chain vote to launch dYdX v4 is expected to be live in early September

August 28, 2023 10:26 am

Tikhonova Yana/Shutterstock modified by Blockworks

The community that oversees the dYdX protocol is looking to adopt dYdX v4 in a recent governance proposal.

The crypto derivatives exchange plans to launch a custom dYdX app chain using the Cosmos SDK has been in the works since early last year as it migrates from an Ethereum rollup.

A public testnet of dYdX v4 was launched in early July and has seen transaction volumes north of $46 million.

MEV mitigation is the subject of ongoing discussion, with monitoring by Skip Protocol, combined with some sort of governance-based social slashing the trendy approach.

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On the governance front, Callen Van Den Elst from Wintermute has noted that a handful of requirements must be met in order to successfully launch dYdX v4.

Notably, DYDX, the native token of the network, will be the layer-1 token for its new app chain. DYDX tokens will be bridged through a one-way Ethereum smart contract commissioned by the dYdX Foundation, and validators must reference the Ethereum Smart Contract when distributing DYDX tokens on the app chain.

Community governance will also determine whether a wrapped version of the Ethereum-based DYDX token (wethDYDX) will have the same governance and utility as ethDYDX tokens on dYdX v3.

This final requirement is necessary to ensure that governance on Ethereum remains functional during the transition period.

These proposal items will all be included in a 4-day Snapshot vote beginning Monday at 7:49 pm ET.

The price of DYDX is trading at $2.16, up from $1.97 the day prior as of 10:15 am ET.

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