dYdX V4 Update

The launch of dYdX V4 is tentatively expected to occur in September or early October. For the last three months, the team has increasingly teased details surrounding the architecture of the application-specific blockchain. Many of the concerns outlined in our piece from a year ago have now been addressed. We presume more updates and information will be released regularly until the chain launches.

Seamless Crosschain UX

dYdX’s move into the Cosmos posed serious concerns about losing Ethereum-based users. Bridging from Ethereum to Cosmos today is a difficult task involving a less than optimal UX generally only mastered by power users. Additionally, the required switch in tooling from an Ethereum wallet like Metamask to a Cosmos wallet such as Keplr, and the lack of non-wrapped USDC in the Cosmos, gives rise to potential barriers for users to transition with the exchange.

Circle announced both CCTP and USDC native to the Cosmos, providing pivotal solutions for the dYdX chain. CCTP enables USDC to be moved easily between chains without trust in any third party besides Circle. The dYdX grants program has already funded the creation of a relay that will allow users to easily bridge ERC20 USDC on Ethereum to USDC on the dYdX chain. This crucial innovation will allow a UX that abstracts away the bridging process into a single signature from an Ethereum wallet that results in native USDC on the new chain, ready to be used for trading. This development removes the need to trust a wrapped asset or bridge.

The founder of dYdX has expressed users will be able to simply click “deposit” from any major wallet on any major chain and end up with USDC on dYdX that can be utilized for trading. The entire Cosmos experience will be abstracted away, there will just be a dYdX experience. It is clear that the dYdX team is aware of and addressing all concerns around user retention due to the move.

Technical Architecture