DYdX Foundation CEO Charles d’Haussy said that the exchange is taking a “new step forward” by decentralizing the order book.
Decentralized exchange (DEX) platform dYdX plans to offer a “purely decentralized” order book exchange as it migrates its ecosystem from the Ethereum network to the interchain network Cosmos.
At the Korea Blockchain Week 2023, Cointelegraph’s Andrew Fenton spoke with dYdX Foundation CEO Charles d’Haussy about the DEX’s plans to implement decentralized order books on the exchange and how it plans to shift its ecosystem to a new blockchain network.
In the interview, d’Haussy told Cointelegraph that one of the issues faced by DEXs is the slow performance of on-chain order books. Because of this issue, order books for DEXs had to be taken off-chain to cater to the needs of the users. He explained:
“If you have like a one-second block time, you still have a one-second latency. And the market of crypto derivatives is a very high-frequency market. So, you cannot offer one-second latency.”
Because of this, d’Haussy highlighted that the dYdX is taking a “new step forward” in terms of decentralization by making the order book decentralized. According to the executive, the order book will still not be on the dYdX chain because it would still be slow but would be hosted within the validators.
“So, the architecture choice by dYdX engineers is to decentralize the order book, without adding it on-chain, because it will be too slow. The decision was made to essentially host the order book within the memory of the validators,” d’Haussy added.
d’Haussy believes that this method is a “new thing within the space.” The executive explained that validators are only usually validating blocks and creating new blocks with a set of transactions. The dYdX Foundation CEO also said that the validators will still do this on the dYdX chain, but they will also have the role of storing order books in their memory. “And that’s one solution, which we’ll use to essentially offer to the market a purely decentralized order book exchange,” he explained.
Apart from the decentralized order book, d’Haussy also spoke about dYdX’s move to Cosmos. The executive clarified that the platform will be fully transferring its platform. “dYdX is not expanding, dYdX is migrating. So, the Ethereum exchange will close within a few months […] we are migrating the full ecosystem,” he explained.
️ v4 Adoption & DYDX Token Migration
The dYdX community has voted in support of v4 Adoption and a potential DYDX Token Migration❗
— dYdX Foundation (@dydxfoundation) September 3, 2023
According to d’Haussy, users will barely notice the change as it would be very smooth. Users will only need to connect their MetaMask wallets to the new dYdX chain, and the executive said that they will “take care of all the heavy lifting.”