Episode 479

dYdX – Decentralized Perpetual Exchanges

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2022 has proven time after time that centralised entities are prone to multiple points of failure, intentional or not. Decentralised finance (DeFi) addresses these, but the user experience has often been lacklustre compared to that from centralised finance (CeFi). Exchanges are the backbone of any market, but high throughput is required in order to ensure that both makers and takers can proficiently use them. Decentralised exchanges have long faced issues due to bandwidth constraints native to blockchains, but recent L2 scaling solutions have provided a considerable increase in terms of throughput. For example, dYdX is currently the largest consumer of STARKs, but growing institutional and retail interest in derivative financial products urges for an even better alternative.

We were joined by Antonio Juliano, founder & CEO of dYdX perpetual exchange, to discuss about the upcoming transition to dYdX V4 and what challenges decentralised exchanges have to face amidst technological bottlenecks and upcoming regulations.

Topics discussed in the episode

  • Antonio’s background & timing products
  • dYdX product overview
  • Price feed oracles
  • dYdX user demographics & UX
  • Development timeframes & taking risks
  • Order book vs. AMM
  • Building a sovereign blockchain on Cosmos
  • The challenges of decentralising order books
  • IBC integrations and composability
  • Current state of scaling solutions
  • Migrating from dYdX V3 to V4 & token utility
  • DeFi vs. CeFi
  • DeFi education & regulatory outreach

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