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dYdX, a decentralized exchange that supports the ongoing trading of crypto assets, including ethereum (ETH) and bitcoin (BTC), has suspended its Layer-2 transfer feature.
This step follows recommendations from the product and legal teams and aims to seal potential exploits.
The platform has stated that the L2 transfer feature will ship once they activate v4. For now, dYdX apologizes for any inconvenience caused.
DeFi protocols remain a target for hackers. In 2022, billions are lost as attackers find and exploit weaknesses in DeFi smart contracts and bridges.
Safety precautions by dYdX prevent that from happening, protecting user assets.
dYdX is a DeFi protocol, enabling perpetual futures trading without trust. Users can trade listed assets through the portal without registering an account or submitting details as part of the know-your-customer (KYC) requests on centralized exchanges like Bybit.
As of January 28, dYdX had $421.43 million and is one of the most liquid derivatives trading platforms on Ethereum.
With the collapse of several centralized exchanges, which were once considered stable and liquid, including FTX, most people are moving their assets to non-custodial wallets like MetaMask. From the wallet, they are free to trade various assets at low prices while still controlling their assets.
The dYdX platform offers options for traders who want to be in control when trading as they would through a centralized exchange like Binance. To realize this seamless experience, the Layer-2 transfer feature is an important part of this convenience.
dYdX launched its Layer-2 feature in the first half of 2021, enabling perpetual trading across margins. The solution marks cost benefits and scalability advantages using the StarkWare StarkEx scalability engine. For trustless operations, derivative trading protocols also use smart contracts.
The Layer-2 transfer feature, as confirmed by the team, will be re-enabled with dYdX v4. This launch will launch the derived protocol as an interoperable standalone blockchain based on the Cosmos software development kit (SDK) and the underlying infrastructure, the Tendermint Proof-of-Stake consensus algorithm. Developers say the exchange will be off-chain and feature an off-chain matching engine and order book with higher throughput.
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