Exciting news has emerged as dYdX, a leading cryptocurrency exchange, has unveiled the public testnet for its highly anticipated “v4” iteration. The exchange’s development team announced this significant milestone on July 5, bringing us closer to the future launch of the v4 mainnet.
According to the announcement, the future implementation of v4 on the mainnet holds great promise as it is anticipated to enable the exchange to achieve “full decentralization.”
Currently built on the Ethereum and StarkEx network, dYdX operates as a decentralized exchange (DEX) by not holding users’ funds. However, it does possess a centralized order book and matching engine that facilitates market makers’ placement of limit orders. This stands in contrast to automated market maker DEXs such as Uniswap, which leverages on-chain pricing algorithms to facilitate buyer-seller matching.
In the upcoming release of dYdX version four, a significant change will take place as the centralized order book and the matching engine will be eliminated. This move will transform the exchange into a fully decentralized platform, but it won’t rely on an automated market maker. The protocol plans to achieve this by operating parts of the application on a distinct dYdX network with its own validators, facilitating on-chain storage of the order book.
To encourage user engagement and facilitate testing, the announcement states that users can request testnet funds as of 5:00 pm UTC on July 5. This will enable them to explore the app, engage in virtual trades, monitor profit and loss, and perform other essential functions offered by the exchange. Although the ability to test bridging between networks is not yet available during the public testnet phase, it is expected to be implemented in due course.
Following the completion of the testnet phase, the protocol’s team aims to execute the fifth milestone of their roadmap, which involves the integration of stablecoins into dYdX and the addition of support for Cosmos inter-Blockchain Communication, granting Cosmos users to the app. Once this milestone is accomplished, the launch of version four is expected to follow suit.
Earlier this year, in April, dYdX made headlines by announcing the winding down of its services in Canada due to regulatory challenges.
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