Exploring SubDAOs: Advancing dYdX’s Path to Full Decentralization

The decentralized trading platform dYdX is looking to up its game when it comes to decentralized governance. A post from Australian-based Fox Labs Digital suggested that the platform should consider dividing oversight responsibilities among several smaller decentralized autonomous organizations (DAOs). This comes as dYdX is preparing to upgrade the Cosmos blockchain to its fourth version (v4). The main goal is to make their platform “fully decentralized” according to a blog post.

Expanding SubDAO for Inclusivity

With the launch of v4 and the expiration of its operations subDAO, the dYdX community is approaching a crucial stage that will determine the future of the platform. Fox Labs stated: “This is not just about shaping the future of dYdX but also about building a model for how a decentralized trading platform can operate effectively and inclusively.”

dYdX utilizes subDAOs to define core functions and be accountable to its community. Currently, there are two subDAOs for grants and operational activities. The platform aims to diversify further for greater inclusivity and openness.

Scaling Amidst Complexities and Education Challenges

The move to Cosmos follows significant growth in order processing on dYdX. With over $341.5 million in total assets locked (TVL) according to DeFi Llama, the platform had to find a scalable solution to keep up with the demand. Additionally, the complexities of self-custody make it hard to educate users on the importance of these protocols. Vice President of the dYdX Foundation David Gogel stated “There’s still a lot of work to do to educate them. It’s a complicated journey.”

Centralized exchanges still account for the majority of trades when compared to DEXs. Uniswap had processed more than $642 million in orders through the past day; Binance had dealt with more than $4.28 billion over the same period. Despite the collapse of the FTX exchange last November, the DEXs didn’t benefit as much as expected.

Besides decentralized spot trading, dYdX also offers its users the option of margin trading. Furthermore, the team at dYdX is currently exploring the renewal of its dYdX grants program to help support the growth and development of the broader DeFi community and projects. The dYdX community has had a generally positive response to the program with most criticisms being that it lacks transparency and accountability.

Paving the Way for Decentralization and Growth

In sum, dYdX’s exploration of subDAOs signifies a significant step toward full decentralization. dYdX’s pioneering efforts in DEXs have the potential to foster inclusivity, and diversity, and accelerate ecosystem growth. With the growing adoption of subDAOs, the crypto industry enters a new era of distribution, efficiency, and scalability.

Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

Previous articleLedger Recover: Everything You Wanted To Know
Next articleZoom Boosts AI Capabilities with Anthropic Partnership
Steve Gates
Steve shows his dedication by holding 90% in cryptocurrencies, 10% to pay the bills.