The perp trading protocol DyDx is planning to stop functioning as an Ethereum L2 and move to its own Cosmos SDK based L1 chain by the end of the year

DyDx announced this just a few minutes ago on twitter: [

They’re citing scalability issues as the main reason for the change.

They’ve also published a blog post with more details: [

Personally, the security guarantees of an Ethereum L2 are what made me prefer DyDx over alternative protocols.

Is the higher scalability worth the lower security & decentralization? What do you think?

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9 thoughts on “The perp trading protocol DyDx is planning to stop functioning as an Ethereum L2 and move to its own Cosmos SDK based L1 chain by the end of the year”

  1. I suspect it does not help that Cairolang probably does not have a developer base. They would clearly move a lot faster with cosmos and have more control over how it all works.

    I suspect the others will also shift to have more control over their respective underlying technologies.

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  2. Considering the macroeconomic, the winners will be defined by their ability to lower transaction costs and additional features, which Cosmos offers. I can only assume that you will see a mass migration towards lowest cost options since margins overall will be tight due to ongoing recession. Cash flow will be king as always

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  3. Curious if fees or royalty to Starkware ( a component they can not insource and which uses AWS to compute) were adding up!! Maybe the delayed merge also gives some concern as many changes danksharding etc are underway.
    Anyway DyDX volumes are largest among DEX on derivatives so interesting to see when to go live and what volume.

    Uniswap on Polygon seems to be doing well

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  4. the “eth decentralization is great” argument make sense only until its on POW,

    now that’s switching to POS how is that different from any other POS? especially considering 40% all current supply got minted during eth ipo

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  5. I always had my eye on DyDx but the Eth gas fees was always a blocker, I finally got into curve when they were available on other networks.

    So what security guarantees does does eth offer that would make you choose Eth over Cosmos, is it really that big of a risk ?

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