Yesterday, an interesting announcement got drowned out by the launch of further meme farming initiatives (see $PASTA and $HAM). dYdX, the decentralized margin trading platform based on Ethereum, announced they will be partnering with StarkWare on a Layer 2 scaling solution for their perpetual contracts.
What really caught my eye was that the team stated this would be live by the end of the year. After years of discussion, it seems like Layer 2s are finally here.
This move will benefit dYdX’s UX in a couple of different ways. For one, trades will be submitted on-chain using ZK-Rollups for lower gas costs. Given how high gas costs have gotten lately, this is music to the community’s ears. That being said, this is only touching the surface of what this partnership unlocks for dYdX.
In theory, this should enable them to offer truly instant trading. Additionally, price reports can be used as soon as they are signed rather than mined. So these oracle performance improvements allow for lower margin requirements, which means higher maximum leverage as well. This will also enable cross-margin where users can trade multiple perpetual contracts from the same margin account. It’s truly incredible how many additional features can be unlocked with DeFi protocols moving to Layer 2.
What I’m trying to get across in this post is: the race for L2 is underway. It actually has been underway for a while now, but the next few months we’l