DyDX introduces version 5.0 of its blockchain

DyDx, the famous perpetual trading cryptographic protocol, has dropped another bombshell by announcing version 5.0 of its namesake blockchain.

The new software update introduces important technical improvements such as “Isolated Markets” and the “Protocol-enshrined LP Vault”.

In this context, the DYDX crypto, the chain’s governance and gas token, could record a bullish rally if the product is appreciated by the community and manages to attract new investment capital.

Let’s see everything in detail below

DyDx launches version 5.0 of its blockchain: all the best techniques introduced

Decentralized perpetual trading protocol DyDX today debuted a new software update for its blockchainofficially launching version 5.0 and introducing numerous technical advantages.

In particular, the platform introduces “Isolated Markets”, improving the user experience and bringing numerous potential new markets into the supply chain, and the “Protocol-enshrined LP Vault” which simplifies and automates liquidity extraction strategies.

Going into more detail with the “Isolated Markets” a a new trading model is introduced that provides different guarantee pools and insurance funds for each isolated marketwithout a single body to protect the solvency of the blockchain and the functionality of the protocol from the risks of volatility in the market.

Until today, in fact, there was a single guarantee pool for all markets, with many exchanges having been declared incompatible with the trend of the DyDX chain, due to the potential destabilization of the protocol.

With the launch of Isolated Markets, the DyDx team revealed thatOver 800 new markets will be availablewhich will be chosen and presented through governance voting.

Furthermore, in parallel with this innovation, the so-called “Isolated Margin” is also introduced, which allows traders to trade any market as an isolated position, managing the risk of the individual position, rather than balancing the margin on all open positions.

This way, traders have the ability to limit collateral to a single trade, limiting possible volatility risks in a single market.

Another novelty 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 deposit into the DyDx vault.

User deposit USDCwhich is then used to automatically provide liquidity on both sides of the order book, thus offering an increase in revenue and bringing new potential liquidity to the market.

The decentralized platform team has clarified that in this first phase LPs will not be available on the frontend, but will be introduced in the coming weeks.

Other minor benefits brought by the update concern DYDX integration with protocols such as Slinky Sidecar and Raydium.

In particular, the integration with Raydium will unlock Oracle pricing across a wide range of products Solana ecosystem, while Slynky will improve the speed of aggregation of quotes, allowing real-time querying 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 DYDX crypto: possible appreciation in view of the launch of v5

As the DyDx team continues to technically improve their blockchain by adding very interesting features, the the eponymous DYDX token does not appear to be growing at the same pace with prices losing around 29.5% in the last 30 days.

Nonetheless, while the cryptocurrency’s migration from the Ethereum ecosystem (ethDYDX) to its own infrastructure (native DYDX) is still ongoing, it is possible that the bull will visit the market again.

In fact, to date, according to data from DeFiLlamaoverall the TVL of the DyDX v3 and v4 chain amounts to $450 million, but with the launch of v5 over 800 new markets are expected and new growth opportunities liquid assets on the chain.

Therefore, if the new update brings new capital inflows and new trades within the network, the DYDX token would have the possibility of recording a bullish rally.

As the government and gas tokens of the ecosystem, it is possible that an increase in exchange metrics could lead to an appreciation of the crypto asset, which has been in a strong bearish trend since March 2024.

At this juncture, prices went from the local maximum of 4.3 dollars to the current 1.42 dollars, with a reduction of approximately 67%.

Source: https://coinmarketcap.com/currencies/dydx-chain/

The DYDX coin particularly suffered from the weight of new token unlocks from 2023 until March 2024: in fact, while its price remained relatively “stable” without particular signs of volatility, the market capitalization recorded a decidedly greater increase.

In detail, from January 1, 2023 to March 2024, DYDX’s marketcap went from $72 million to $1.24 billion, growing more than 17 times.

The price of the currency, however, increased “only” 3.9 times, only to collapse in the following weeks.

This highlights a potential speculative nature of the currency which has been severely compressed due to the high amount of supply released into the market to the team, community and investors.

If the unlocks decrease in intensity, and if v5.0 of the DYX blockchain manages to drive the growth of the protocol’s TVL and liquidity, we will have a good chance of seeing growth in the main cryptocurrencies in the ecosystem, with the target of $2 on the horizon.

ethDYDX market capitalization. Source: https://coinmarketcap.com/currencies/dydx-ethdydx/

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