dYdX to launch decentralized order books exchange on Cosmos: KBW 2023
dYdX Foundation CEO Charles d'Haussy said that the dYdX exchange is taking a "new step forward" by decentralizing the order book.
Decentralized exchange (DEX) platform dYdX is planning to offer a “purely decentralized” order books exchange as they migrate their ecosystem from the Ethereum network to the interchain network Cosmos.
At the Korea Blockchain Week 2023, Cointelegraph's Andrew Fenton spoke with dYdX Foundation CEO Charles d'Haussy about the DEX’s plans to implement decentralized order books on their exchange and how they plan to shift their ecosystem onto a new blockchain network.
In the interview, d'Haussy told Cointelegraph that one of the issues that decentralized exchanges are facing is the slow performance of on-chain order books. Because of this issue, order books for DEXs had to be taken off-chain to cater to the needs of the users of the trading platform. He explained:
“If you have like a one-second block time, you still have a one-second latency. And the market of crypto derivatives is a very high-frequency market. So, you cannot offer one-second latency.”
Because of this, d'Haussy highlighted that the dYdX is taking a “new step forward” in terms of decentralization by making the order book decentralized. According to the executive, the order book will still not be on the dYdX chain because it would still be slow but would be hosted within the validators.
“So, the architecture choice by dYdX engineers is to decentralize the order book, without adding it on-chain, because it will be too slow. The decision was made to essentially host the order book within the memory of the validators,” d'Haussy added.
d'Haussy believes that this method is a “new thing within the space.” The executive explained that validators are only usually validating blocks and creating new blocks with a set of transactions. The dYdX Foundation CEO also said that the validators will still do this on the dYdX chain, but they will also have the role of storing order books in their memory. “And that's one solution, which we'll use to essentially offer to the market a purely decentralized order book exchange,” he explained.
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