dYdX has been a pioneer in adopting next generation blockchain architectures to support traders. We adopted Starkware’s rollup technology before L2s were in vogue, and with dYdX v4, our open-source code (“dYdX Chain”), we are adopting a standalone app-chain model. Derivatives exchanges are by nature high leverage and high risk places of trade, and a maximally decentralized approach to the entire market structure is needed to ensure constant up-time and safety from manipulation.
A necessity for the success of the app-chain approach is highly flexible, fast, and easy to use interoperability. The dYdX Chain will integrate users from roll ups, Ethereum L1, other app-chains, and centralized exchanges in order to serve as many users and builders as possible. This is where Squid and Axelar come in - an interoperability solution built for this purpose: single click onboarding from any blockchain environment.
What is Squid?
Squid is a single click cross-chain transaction builder, supporting cross chain swaps in under 20 seconds. Squid utilizes Axelar’s decentralized interoperability infrastructure, approved by Uniswap’s bridge provider assessment. Squid provides interoperability services via an API, SDK and front end developer tools to teams across 60+ chains, and has done over $200 million in volume since its launch in January 2023.
dYdX v4’s open-source code integrates with Squid’s API to support single click onboarding and offboarding to a dYdX app-chain from any of Squid’s supported EVM chains or rollups. Users will be able to deposit into a dYdX Chain account from within a dYdX Chain front end in one click, powered by Squid.
How It Works
Goal: Deposit or withdraw to / from a dYdX Chain address.
User wants to get USDC on dYdX Chain, they have USDC on Ethereum L1.
Route: USDC is sent to Osmosis via Axelar General Message Passing (GMP), then swapped to Noble USDC on Osmosis, bridged from Noble USDC to dYdX Chain from Osmosis via the Noble chain. All in one click.
User wants to get USDC on dYdX Chain, they have ETH on Arbitrum.
Route: ETH is swapped into axlUSDC on Kyberswap, axlUSDC is sent to Osmosis via Axelar GMP, axlUSDC swapped for Noble USDC on Osmosis, then bridged to dYdX Chain from Osmosis via the Noble chain. All in one click.
Interested in learning more about this integration? Check out this blog post from Axelar for more information.
About dYdX and Terms
dYdX is the developer of a leading decentralized exchange on a mission to build open, secure, and powerful financial products. dYdX currently runs on audited smart contracts on Ethereum, which eliminates the need to trust a central exchange while trading. We combine the security and transparency of a decentralized exchange, with the speed and usability of a centralized exchange.