DeFi
DYdX will complete v5 upgrade next week
DYdX v5 introduces Isolated Markets, allowing users to spread their collateral across multiple positions.
DYdX, a decentralized perpetual exchange, is set to complete the rollout of its highly anticipated v5 upgrade next week.
Announced on June 7, the v5 iteration of dYdX introduces a suite of new features, including isolated markets, batch orders, liquidity vaults, and new price oracles. The dYdX community vote to implement the v5 upgrade with 98.4% on June 3.
DYdX commands a total value locked (TVL) of just under $500 million, placing it among the top 20 DeFi projects by TVL, according to data from DefilLama. The protocol ranks second among perpetual DEXs, behind GMX with $544 million.
DYdX is followed by Jupiter and Hyperliquid with $412 million and $392 million, respectively.
The protocol’s multiple iterations have generated more than $120 billion in cumulative trading volume, the dYdX Foundation shared in an April blog. job.
New features
The introduction of Isolated Markets is one of the biggest changes introduced by v5. Previously, all markets on dYdX shared the same collateral pool, limiting the number of markets available. With Isolated Markets, each market now has a separate collateral pool, enabling the launch of up to 800 new markets on the protocol.
Isolated Margin is another key feature of the update. This allows traders to treat each market as an isolated position with distinct risk parameters, rather than having all positions cross-margined against a single collateral pool.
“Traders have the option to limit the collateral to a specific position and manually adjust the collateral for that given position,” dYdX said in a statement. “We believe this will allow users to more intuitively understand and adjust their collateral management. »
The update includes price oracle integrations of Slinky and Raydium, a Solana-based DEX limit order book. The Slinky integration will enable block-by-block price updates with improved latency by leveraging dYdX validators, while the Raydium oracle provides price data on all assets traded on the Raydium exchange.
V5 also introduces batch order cancellations allowing users to cancel up to 100 short-term orders simultaneously.
The update will further introduce liquidity provider (LP) vaults providing automated LP strategies in the coming weeks.
Season 5 Incentives
The launch of DYdX version 5 will likely coincide with the project’s fifth season of user incentives. THE campaign will offer $5 million worth of DYDX tokens to traders and will operate until mid-July 2024, pending a governance vote.
The season will also introduce a multiplier for DYDX stakeholders, enhanced points for front-end trading activity, and separate trading reward allocations for major markets including BTC, ETH, and SOL. Season 5 will also distribute $100 deposit bonuses to the first 500 new accounts registered.
Migrating from Ethereum to Cosmos
In 2017, Antonio Juliano launched dYdX as a decentralized exchange based on Ethereum.
DYdX ranked among Ethereum’s top DeFi protocols for several years, with the project migrating to a dedicated Layer 2 application chain with the launch of its v3 iteration in April 2021. However, dYdX left the Ethereum ecosystem to deploy a Cosmos-based application chain with the deployment of it’s fourth version in November 2023.
The project has attracted funding from leading crypto investment firms, including Paradigm, Polychain, and Andreessen Horowitz, over four funding rounds.