dYdX has successfully launched its layer-1 proof-of-stake blockchain, marking a milestone in the decentralized cryptocurrency space.
Genesis Block Creation by Chain Validators
The inaugural moment arrived with the creation of the genesis block by chain validators, establishing the foundation for the dYdX Chain.
A noteworthy feature of the dYdX Chain is its commitment to distributing all fees to validators and stakers in USD Coin. This encompasses trading fees in USDC and gas fees for both DYDX and USDC-denominated transactions.
Cosmos SDK, CometBFT and Antonio Juliano’s Insight
Powered by Cosmos’ software development kit, the PoS blockchain network utilizes CometBFT as its consensus protocol. Validators play a crucial role by staking DYDX to secure the blockchain and oversee governance operations.
Antonio Juliano, the visionary founder of dYdX, emphasized the pivotal role played by industry giants such as Circle and Coinbase launching on Cosmos. Juliano previously touted dYdX as the “first-ever decentralized, off-chain orderbook” and highlighted its open-source nature.
Transition from Ethereum to dYdX Chain
Before its native layer-1 chain, dYdX operated with an ERC-20 token on Ethereum’s layer-2 protocol. The community’s democratic decision led to the adoption of DYDX as the L1 token, accompanied by a one-way bridge from Ethereum. The utility of DYDX expanded to include staking, network security, and governance on the dYdX Chain.
In a move reminiscent of Ethereum’s shift to PoS, stakers and validators secure the network, earning dYdX protocol fees proportional to their staked assets. The Cosmos distribution module facilitates the distribution of fees collected by the dYdX Chain protocol to validators and stakers.
dYdX Chain’s Accessibility, Combatting Spam and Unified Voting
An announcement from dYdX revealed the removal of the “Proposing Power” concept from dYdX v3 in the new governance model. Any holder can now create a governance proposal with a deposit, fostering a more inclusive decision-making process.
To prevent spam proposals, the dYdX Chain implements minimum deposit thresholds and robust voting mechanisms with veto powers. Participation in chain governance requires the use of staked DYDX tokens.
Chain validators seamlessly inherit the voting weight of stakers, unless specific stakers choose to vote individually on proposals. This cohesive approach enhances the efficiency of the governance model on the dYdX Chain.