The creation of the genesis block by chain validators marks the successful launch of dYdX’s layer-1 proof-of-stake blockchain.
dYdX, a decentralized cryptocurrency exchange, has inaugurated its layer-1 blockchain with the creation of its genesis block, which will utilize DYDX tokens.
The dYdX Chain is configured to pay all validator and staker fees in USD Coin.
This includes trading fees denominated in USDC as well as gas fees for transactions denominated in either DYDX or USDC.
The proof-of-stake (PoS) blockchain network was constructed with the Cosmos software development kit and utilizes the CometBFT consensus protocol.
Validators stake DYDX in order to secure the blockchain and conduct network governance operations.
Antonio Juliano, the founder of dYdX, emphasized that the introduction of the dYdX Chain was contingent upon Circle and Coinbase launching on Cosmos prior to the creation of its genesis block.
Juliano previously characterized dYdX as an “entirely new blockchain built on the Cosmos SDK” and the “first-ever decentralized, off-chain orderbook.” Additionally, the blockchain is wholly open-source.
Before the launch of dYdX’s native layer-1 chain, DYDX was an ERC-20 token functioning on dYdX’s original Ethereum layer-2 protocol.
The dYdX community voted to adopt DYDX as the L1 token of the dYdX Chain, adopt a one-way bridge from Ethereum to the dYdX Chain, and give encased Ethereum DYDX (wethDYDX) the same governance utility as ethDYDX in dYdX v3.
Due to community votes and governance decisions, the DYDX token’s utility on the dYdX Chain has expanded to include staking, network security, and participation in governance.
Similar to Ethereum’s transition to PoS, validators, and stakers secure and protect the network in exchange for dYdX protocol tokens proportional to the amount of staked assets.
Through the Cosmos distribution module, fees collected by the dYdX Chain protocol are distributed to validators and staking parties.
A dYdX announcement emphasized the company’s anticipation that governance on the dYdX chain will be more accessible than its previous Ethereum-based layer-2 protocol.
“The dYdX Chain does not have the dYdX v3 concept of ‘Proposing Power’; instead, the governance module effectively enables any holder to create a governance proposal with a deposit.”
Anti-spam provisions include minimum deposit requirements and voting mechanisms with veto powers.
To participate in blockchain governance, users can only stake DYDX tokens.
Unless specific stakers choose to vote on proposals individually, chain validators will also inherit the voting weight of stakers.
