We are excited to partner with @StarkWareLtd on a Layer 2 scaling solution for Perpetual Contracts, based on the StarkEx scalability engine & our trusted smart contracts. Perpetual Contracts on dYdX will be powered by StarkEx by the end of this year. https://t.co/XXbHhacaw0
— dYdX (@dydxprotocol) August 18, 2020
StarkWare is a Layer-2 scaling and privacy solution using zkSTARKS Technology. Outside of being backed by high profile investors like Pantera Capital, Polychain Capital, and Vitalik Buterin, StarkWare is powering a suite fo DeFi protocols including DeversiFi’s Layer 2 exchange.
With this partnership, dYdX will leverage StarkEx, a scalability engine offering scalable non-custodial trading on cryptocurrency exchanges.
Benefits of this integration include but are not limited to:
- Significantly reduced gas costs and trading fees
- Reduced minimum trade sizes
- Cross-margin perpetual trading
- More trading pairs
- Instant settlement
- High-performance price oracles
- Higher leverage and lower liquidation penalties
With StarkEx, trades are matched off-chain and are settled on-chain using zK-Rollups. This helps combats front-running, a practice that has plagued DEX trading since inception. The advent of updated price oracles increases the economic security of the system against flash crashes and allows for real-time liquidations.
dYdX CEO, Antonio Juliano, tweeted that they have some of the most complex production contracts running on Ethereum and that StarkWare can scale them today.
Proud to be working with the entire @StarkWareLtd team building L2 dYdX
We have some of the most complex production contracts running on Ethereum, and Starkware can scale them *today* https://t.co/VWT7vds15w
— Antonio Juliano (@AntonioMJuliano) August 18, 2020
Outside of this integration, StarkWare took part in the great Reddit scaling bake-off 2020, a fully detailed report of that here. While it’s unclear who the winning entry will be, it’s obvious that StarkWare is solidifying itself as a trusted solution for exchanges looking to offer scalability without compromising on privacy.
For dYdX, the partnership further expands the lead it’s established in the margin trading sectors. Despite products like DerivaDEX and Strike set to come online in the coming months, dYdX’s lead in pseudonymous leverage gives it a chance to rival Bitmex – especially after the leading exchange announced they will be enforcing KYC for all customers on here on out.
While dYdX perps are still unavailable to US customers, international traders are quickly flocking to the SF-based company as a means of trading top DeFi tokens with leverage in a permissionless fashion.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.