dYdX, a decentralized exchange that supports perpetual trading in crypto assets including ethereum (ETH) and bitcoin (BTC), has suspended the Layer-2 transfer function.
The move follows a recommendation from the product and legal teams and aims to seal a potential exploit.
The platform has stated that the L2 transfer function will be shipped once they activate v4. For now, dYdX apologizes for the inconvenience caused.
DeFi protocols continue to be targets for hackers. In 2022, billions were lost when attackers discovered and exploited flaws in DeFi smart contracts and bridges.
dYdX’s security precaution prevents this from happening, safeguarding user assets.
dYdX is a DeFi protocol that enables trustless trading of perpetual futures. Users can trade listed assets through the portal without signing up for accounts or submitting details as part of the know-your-customer (KYC) required on centralized exchanges like Bybit.
As of January 28, dYdX I had $421.43 million and was one of the most liquid derivatives trading platforms on Ethereum.
With the collapse of some centralized exchanges, once thought to be stable and liquid, including FTX, most people have moved their assets to non-custodial wallets like MetaMask. From these portfolios, they are free to trade a wide range of assets at low prices while still in control of their assets.
The dYdX platform offers an option for traders who want to be in control while trading as they would through centralized exchanges like Binance. To realize this seamless experience, the Layer 2 pass-through function was a key part of this convenience.
dYdX thrown out its Layer-2 feature in the first half of 2021, allowing for cross-margin perpetual trading. The solution tagged cost benefits and scalability advantages using StarkWare’s StarkEx scalability engine. For trustless trades, the derivatives trading protocol also uses smart contracts.
The Layer-2 transfer function, as the team assures, will be reactivated with dYdX v4. This release will launch the derivative protocol as a standalone interoperable blockchain based on the Cosmos SDK and the underlying infrastructure, the Tendermint Proof-of-Stake Consensus Algorithm. The developers said that the exchange would be off-chain and would feature an off-chain matching engine and order book with higher performance.
