dYdX Initiates Token Migration Following Layer-1 Blockchain Inception
Jessie A Ellis Oct 28, 2023 08:10
Antonio Juliano, dYdX founder, has flagged an upcoming large-scale migration of locked $DYDX tokens to the dYdX Chain following its recent launch. This migration, strictly abiding by legal agreements, marks a significant phase in dYdX's transition to a layer-1 blockchain, amplifying the utility of DYDX tokens for staking and governance purposes.
Antonio Juliano, the founder of dYdX, announced on Twitter on 28 October 2023, regarding impending substantial transfers of $DYDX tokens in the following days. This alert is in alignment with dYdX Trading Inc. and other locked token holders' plans to migrate tokens to the dYdX Chain, which will be recorded as transfers on both Ethereum and the dYdX Chain. It's pertinent to note that these tokens will remain locked and are not slated for sale.
Following Juliano's announcement, the dYdX Foundation provided further details, anticipating large internal movements of the locked ethDYDX tokens held by investors and team members in the near future. The Foundation has outlined the process of bridging these locked tokens from Ethereum to other blockchains, inclusive of the dYdX Chain, via tweets dated 28 October 2023. Additionally, it is actively monitoring locked token holders’ wallet addresses to ensure compliance with legal agreements.
The dYdX Foundation has made it clear that it is prepared to take legal action against locked token holders who fail to adhere to the applicable requirements. The tokens involved in this migration will continue to be bound by the same transfer restrictions and release schedule.
Launch of the dYdX Layer-1 Blockchain
A subsequent media report shed light on the successful launch of dYdX's layer-1 blockchain, heralded by the production of its genesis block. This blockchain will be powered by DYDX tokens native to the platform. The dYdX Chain is structured to compensate validator and staker fees in US Dollars, encompassing trading costs and gas fees for transactions denominated in either DYDX or USDC.
Empowered by CometBFT as its consensus mechanism, the proof-of-stake (PoS) blockchain was developed utilizing the Cosmos software development kit. The launch was contingent on firms like Circle and Coinbase extending their services on Cosmos before the genesis block's release, as emphasized by Juliano.
Community Accord and Augmented Token Utility
Before the dYdX’s native layer-1 chain introduction, the original DYDX operated as an ERC-20 token on dYdX's initial Ethereum layer-2 protocol. The seamless transition to its own layer-1 chain was facilitated by community consensus which embraced DYDX as the L1 token of the dYdX Chain, established a one-way bridge from Ethereum to the dYdX Chain, and accorded wrapped Ethereum DYDX (wethDYDX) the same governance utility as ethDYDX in dYdX v3.
With the dYdX Chain operational, the utility of the DYDX token has been broadened due to community votes and governance decisions. It is now instrumental for staking, which enhances network security and aids in governance decisions. The Cosmos distribution module is tasked with distributing the accumulated fees to the validators and stakers within the dYdX Chain protocol.
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