dYdX, a crypto exchange, recently launched a public testnet of its iteration of v4, according to an announcement made on the 5th of July from the development team of the exchange. This also marks the completion of milestone 4 out of five, further paving the way for a future launch of the v4 mainnet. If this does get implemented soon, v4 will be expected to allow for complete decentralization of the exchange.
This exchange is currently built on the StarkEx and the Ethereum networks. Since it does not really take custody of the users’ funds, it is generally considered to be a major decentralized exchange. However, it also features a centralized order book- with a matching engine that allows the makers in the market to place limited orders. This further contrasts with the DEXs like Uniswap that employ on-chain pricing algorithms to match the sellers and the buyers.
dYdX Could Be Launching Its Testnet Soon
Version four of dYdX will entirely eliminate this matching engine, as well as the centralized order book, which will make the exchange fully decentralized without having to rely on an automated market maker. According to the documentation from the protocol, it will be doing this by running major parts of the app on a separate network with its own validators- something that will allow the order book to be stored on-chain.
The dYdX exchange announced back in April that it would be totally winding down its services in Canada due to certain issues with regulation. In September 2022, it then offered up a bonus of $25 to new users if they ended up proving that they weren’t bots- which caused some pushback from advocates of privacy. As it turns out, the promotion was abandoned later.