An Introduction to dYdX
dYdX has been working to build the leading protocol for decentralized trading of crypto derivatives. I founded dYdX in 2017 with the goal of making advanced trading more accessible, transparent, and secure.
In 2020, dYdX developed a protocol for trading crypto perpetuals on Ethereum mainnet. As network gas fees skyrocketed, we made the bold decision to migrate to Starkware, a layer 2 Ethereum rollup. This version of the protocol (dYdX v3) has been widely successful, with over $1T in trading volume since inception.
More recently, dYdX has undergone another significant transformation. With the goal of fully decentralizing all parts of the dYdX experience, our team rebuilt the dYdX protocol software our traders know and love as a stand-alone Cosmos appchain. After a year and a half of work, we open-sourced dYdX Chain software, which the community deployed and fully operates with 60+ validators across 34 markets.dYdX Chain is simple to use and powers transactions on the platform.
How USDC Fits Into All of This
Every trade made on both dYdX v3 and dYdX Chain settles near-instantly in USDC, a leading digital dollar. dYdX v3 uses a bridged form of USDC that comes from Ethereum to settle all transactions. When developing dYdX Chain in Cosmos, it was important to enable traders to seamlessly and securely settle positions in USDC, which required a native form of USDC compatible with the Cosmos SDK.
Circle helped bridge the gap, not only for dYdX Chain but the entire Cosmos ecosystem. Circle and Noble, the modular blockchain that takes advantage of core Cosmos technology, worked together to create a Cosmos-native form of USDC that Noble’s IBC-connected appchain issues and distributes. Coinbase also provides a simple experience and global on-ramps for users to get USDC on Noble for use with the dYdX Chain. Users can deposit money from their bank into the Coinbase app, swap US dollars 1:1 for USDC, and withdraw to a Cosmos-compatible wallet to readily send to dYdX Chain via IBC.
Pairing USDC on Noble with the introduction of Circle’s Cross-Chain Transfer Protocol (CCTP) on Noble provides an easy way for users to bring native USDC liquidity to Cosmos from other blockchain ecosystems. CCTP is a permissionless on-chain utility that facilitates USDC transfers securely between blockchains via native burning and minting. dYdX Chain integrated CCTP on Noble to make it simple for users to connect their wallet and deposit USDC from Ethereum and other supported networks. All complexity is hidden behind the scenes, where USDC is burned on the source chain, minted on Noble, and seamlessly routed to dYdX Chain via IBC. This trading experience is more capital-efficient and secure, as it removes the dependency on third-party bridged forms of USDC.
Who is Noble
Noble is a highly flexible and modular blockchain that takes advantage of core Cosmos technology to maximize routes and connections to a variety of appchains and service providers.
“Since the launch of USDC in September 2023, Circle has issued $97M USDC on Noble, and as of January, has facilitated $350M of USDC transfers across 33 blockchains with 75,000 unique transfers. A significant amount of USDC has flowed to the dYdX v4 appchain, which has seen record transaction volume since launching as an appchain in Cosmos. dYdX is poised to benefit from the explosive growth of USDC liquidity as more traders, especially on the retail side, discover the enhancements of their v4 software, such as the decentralized orderbook,” said Jelena Djuric, Co-Founder & CEO at Noble.
USDC and dYdX Chain
Thanks to the team at Circle and Noble, dYdX Chain has processed over $10 billion in trading volume since being deployed by various validators and the dYdX Ops SubDAO. This is a massive feat that could not have been achieved without the innovations of Cosmos-native USDC and CCTP.
At dYdX, we are incredibly thankful for the continued innovation at Circle, as well as their commitment to ensuring user safety and reliability.
Disclaimer and Terms
Please note that this document provides information with respect to the default settings of dYdX Trading Inc. (”dYdX”) v4 software (”dYdX Chain”). dYdX Ops SubDAO, Circle, Noble and Coinbase are independent from and unaffiliated with dYdX. dYdX does not deploy or run v4 software for public use, or operate or control any dYdX Chain infrastructure. dYdX services and products are not available to persons or entities who reside in, are located in, are incorporated in, or have registered offices in the U.S. or Canada, or Restricted Persons (as defined in the dYdX Terms of Use). The information contained herein, and any use of v4 software, are subject to the v4 Terms of Use.
