Michael Bodley

<div id="highlights-block_62c5d532d5f62" class="highlights">
 <ul>
 <li>The buy-in is $2,500 worth of the stablecoin USDC</li>
 <li>The DEX also plans to hold a series of Twitter Spaces to clue the public in on how the best traders “think about market moves,” an executive told Blockworks</li>
 </ul>
 
</div>



Decentralized exchange dYdX Trading on Wednesday kicked off its first trading competition on the cryptocurrency protocol — aiming to pit an influencer against a trader with their money, quite literally, where their mouth is.



Competitors must buy in with $2,500 worth of the stablecoin USDC, an amount they receive back&nbsp; — along with any profits made — after the event. There are also exclusive non-fungible tokens (NFTs) and cash prizes, denominated in stablecoins.



The growth lead of the decentralized exchange (DEX), Corey Miller, told Blockworks a lot of traders hype up their ability to derive alpha via Telegram groups and Twitter, but there’s not necessarily a public “good way to objectively measure how well people perform.”



Rankings for the savviest traders will be measured both in dollars won and lost and percentage gains and dips. The latter is a bid to eliminate whales coming in and parking their voluminous assets in safe plays to generate medium yield on a large amount of cryptocurrency.&nbsp;



The idea is for participants to test their mettle across a wide range of liquid cryptocurrencies, including DeFi digital assets.&nbsp;



The DEX also plans to hold a series of Twitter Spaces to clue the public in on how the best traders “think about market moves,” as well as delve into relevant macro topics.&nbsp;



The launch comes as crypto markets continue to wobble, having lost trillions of dollars in market capitalization since their record highs, following the demise of Terra stablecoin UST and, more recently, the collapse of insolvent crypto lenders, including Celsius and Voyager.



An argument can be made, however, that traders — and especially those of the retail variety — now more than ever are hungry for access to reputable information.&nbsp;



The team — which has been adding staffers, even as a number of high-profile crypto companies have been forced to make steep cuts — has an iPhone app and is now working on an Android sister product. The end goal is to make the experience of buying and selling digital assets on dYdX as seamless for traders as it is logging on to centralized exchanges such as Coinbase and executing a transaction.



Though DEXs have come a long way in terms of usability and accessibility, industry participants say, in the murky, difficult-to-understand world of DeFi (decentralized finance), there’s still much work to be done.&nbsp;



Despite the market downturn, though, Miller said he’s optimistic DeFi is here to stay. 



“How does DeFi win?,” he asked. “It’s about creating a product people will actually want to use.”



The exchange also has its own DAO, complete with a native governance token that dictates how the DAO (decentralized autonomous organization) operates on a day-to-day basis.&nbsp;



On the whole, DEXs such as dYdX have cut into the trading volumes of centralized titans, including Coinbase and Kraken, in a notable way. But, in Miller&#8217;s mind, the “most likely scenario is that the two coexist for a while.” And some DEXs have lower fees than centralized market makers — another potential boon to traders.



The team is also working on the next iteration of its native protocol, an endeavor expected to take six months or so that would, ideally, result in a completely decentralized platform, with the company largely taking a back seat to the community.



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Decentralized Crypto Exchange Kicks Off Contest in Pursuit of Real Alpha

Jocelyn Yang

<div id="highlights-block_62b361ebaefe1" class="highlights">
 <ul>
 <li>The goal for dYdX V4 is to have high throughput for the order book while remaining decentralized, the company said</li>
 <li>DYdX is positioning itself as the largest decentralized derivatives exchange, with more than $690 million in trading volume in the past 24 hours</li>
 </ul>
 
</div>



A crypto derivatives platform based on Ethereum layer-2 blockchains is developing its own blockchain.



The new product from dYdX plans to be based on Cosmos, using Tendermint’s proof-of-stake consensus protocol to validate transactions. Layer-2 protocols are built on top of popular blockchains, such as Ethereum and Bitcoin, and are typically used to increase efficiencies, add features and scale the technology.&nbsp;



The game plan for dYdX V4 — the exchange <a href="https://dydx.exchange/blog/v4-full-decentralization" target="_blank" rel="noreferrer noopener">laid out</a> by the company in January — is to be fully decentralized by the end of the year.&nbsp;



“Developing a decentralized, off-chain order book and matching engine and moving from Ethereum to a dYdX-specific chain as a major [decentralized finance] protocol is very much untested, but we believe it gives the dYdX ecosystem the best shot at having a network that could offer a long term competitive product experience with centralized exchanges,” the company said in a statement.&nbsp;



Founded in 2017 by ex-Coinbase and Uber engineer Antonio Juliano, dYdX is positioning itself as the largest decentralized derivatives exchange — with more than $690 million in trading volume in the past 24 hours, according to <a href="https://www.coingecko.com/en/exchanges/dydx_perpetual" target="_blank" rel="noreferrer noopener">CoinGecko</a> data.&nbsp;



The company noted the existing dYdX product processes at about 10 trades per second and about 1,000 order placements/cancellations per second.



In the company&#8217;s vision for dYdX V4, each validator will “run an in-memory orderbook that is never committed to consensus” such as off-chain. Meanwhile, on a real time basis, “orders will be matched together by the network. The resulting trades are then committed on-chain each block.”&nbsp;



A spokesperson for the company didn’t immediately return a request for comment.



In August 2020, dYdX <a href="https://integral.dydx.exchange/scaling-with-starkware/" target="_blank" rel="noreferrer noopener">partnered</a> with StarkWare to scale decentralized trading. The company <a href="https://cms.blockworks.co/paradigm-leads-65m-round-for-decentralized-exchange-dydx/" target="_blank" rel="noreferrer noopener">raised</a> $65 million in a Series C funding round in June 2021 led by Paradigm.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.