DyDx, famous perpetual trading cryptographic protocol, has dropped another bombshell by announcing version 5.0 of its namesake blockchain.
The new software update introduces important improvements from a technical standpoint such as the “Isolated Markets” and the “Protocol-enshrined LP Vault”.
In this context, the crypto DYDX, governance and gas token of the chain, could register a bull rally if the product is appreciated by the community and manages to attract new investment capital.
Let’s see everything in detail below
Summary
DyDx launches version 5.0 of its own blockchain: all the best techniques introduced
The decentralized perpetual trading protocol DyDX inaugurated a new software update for its blockchain today, officially launching version 5.0 and introducing numerous technical advantages.
In particular, the platform introduces the “Isolated Markets”, improving the user experience and bringing numerous potential new markets within the chain, and the “Protocol-enshrined LP Vault” which simplifies and automates liquidity mining strategies.
Going into more detail with the “Isolated Markets” a new trading design is introduced that features different guarantee pools and insurance funds for each isolated market, without a single entity protecting the solvency of the blockchain and the protocol’s functionalities from the risks of volatility in the market.
Until today, in fact, there was only a single guarantee pool for all markets, with many exchanges that have been declared as not very compatible with the performance of the DyDX chain, due to the potential destabilization of the protocol.
With the launch of isolated markets, the DyDx team revealed that over 800 new markets will be available, which will be chosen and presented through governance voting.
Additionally, parallel to this innovation, the so-called “Isolated Margin” is also introduced, allowing traders to trade any market as an isolated position, managing the risk of the single position, rather than balancing the margin across all open positions.
By doing so, operators have the ability to limit guarantees to a single operation, limiting the possible risks of volatility in a single market.
Another change in the new software concerns, as mentioned, the addition of the “Protocol-enshrined LP Vault” which allows blockchain users to intelligently manage liquidity mining positions by automating the deposit into the DyDx vault.
Users deposit USDC, which is then used to automatically provide liquidity on both sides of the order book, thus offering a boost in revenue and bringing new potential liquidity to the market.
The team of the decentralized platform clarified that in this first phase the LPs will not be available on the frontend, but will be introduced in the coming weeks.
Other minor advantages brought by the update concern the integration of DYDX with protocols such as Slinky Sidecar and Raydium.
In particular, the integration with Raydium will unlock oracle prices on a wide range of the Solana ecosystem, while Slynky will improve the speed of quote aggregation, allowing real-time querying of price feeds directly from the DEX on the DyDX blockchain.
Furthermore, all this unlocks new potential markets and new interoperability connections with the external environment.
Analysis of the price of the crypto DYDX: possible appreciation in view of the launch of v5
While the DyDx team continues to technically improve their blockchain by adding very interesting features, the eponymous token DYDX does not seem to grow at the same pace with prices that in the last 30 days have lost about 29.5%.
Despite this, while the migration of the cryptocurrency from the Ethereum ecosystem (ethDYDX) to its own infrastructure (DYDX native) is still ongoing, it is possible that the bull will return to visit the market.
In fact, up to today, according to the data from DeFiLlama, overall the TVL of the DyDX chain v3 and v4 amounts to 450 million dollars, but with the launch of v5 over 800 new markets are expected and new opportunities to increase liquidity on-chain.
If therefore the new update will bring new capital inflows and new trades within the network, the DYDX token would have the opportunity to register a bull rally.
As the governance and gas token of the ecosystem, it is possible that an increase in exchange metrics could lead to an appreciation of the cryptographic asset, in a strong downtrend since March 2024.
In this juncture, prices have moved from the local high of 4.3 dollars to the current 1.42 dollars, for a reduction of approximately 67%.
The DYDX coin from 2023 until March 2024 has particularly suffered the weight of new token unlocks: in fact, while its price has remained relatively “stable” without particular signs of volatility, the market capitalization has recorded a significantly greater increase.
In detail, from January 1, 2023, to March 2024, the marketcap of DYDX increased from 72 million dollars to 1.24 billion dollars, growing by over 17 times.
The price of the currency, on the other hand, increased by “only” 3.9 times, only to plummet in the following weeks.
This highlights a potential speculative nature of the currency that has been strongly compressed due to the high amounts of supply released to the market to the team, community, and investors.
If the unlocks should decrease in intensity, and if the v5.0 of the DYX blockchain manages to drive growth in TVL and protocol liquidity, we will have a good chance of witnessing growth in the main crypto of the ecosystem, with the target of 2 dollars on the horizon.
