Scaling dYdX with StarkWare

Partnering with StarkWare to scale decentralized trading

dYdX is excited to announce a partnership with StarkWare. Our engineering teams are collaborating on a Layer 2 scaling solution for Perpetual Contracts, based on StarkWare’s StarkEx scalability engine and dYdX’s Perpetual smart contracts. Our Perpetual Contracts will be powered by StarkEx by the end of this year.

To provide the best user experience for traders, we have decided to transition to Layer 2. Traders can expect significantly lower gas costs, and in turn, lower trading fees and minimum trade sizes. We remain committed to our mission of building open, secure, and powerful financial products.

StarkWare is developing software to dramatically improve blockchain scalability by allowing any type of computation to move off-chain, using the Ethereum blockchain as a public immutable commitment layer. StarkWare’s dYdX integration combines STARK proofs for data integrity with on-chain data availability to ensure a fully non-custodial protocol.

What does this partnership mean for our traders?

Significantly Reduced Gas & Trading Fees

Trades are submitted on-chain in ZK-Rollups, reducing the amount of gas required per-trade. We are able to pass on those savings to traders in the form of reduced trading fees across the board.

Reduced Minimum Trade Sizes

Since there are smaller fees per-trade, we are able to offer smaller trade sizes, allowing traders to try out dYdX by starting with a smaller amount of capital.

Cross-Margin

Traders will be able to trade on multiple Perpetual Contracts using a single margin account, allowing for dramatically increased capital efficiency while trading multiple pairs.

More Trading Pairs

With cross margining and increased scalability, we will be able to launch many more trading pairs on dYdX. We will also be able to spin up new pairs faster, allowing traders to trade the tokens they want, when they want to.

Instant Trade Settlement

Trades are matched off-chain and held in batches until the zero-knowledge rollup and proof are submitted on-chain. This prevents front-running of trade settlement and allows for instantaneous balance updates without waiting for a transaction to be mined. Trading on dYdX will feel every bit as fast as trading on a centralized exchange.

More Performant Price Oracles

Prices are attested-to by oracles using STARK-compatible signatures, allowing prices to be used as soon as they are signed, rather than waiting for a transaction to be mined. This significantly increases the economic security of the system against flash crashes, and allows for real-time liquidations.

Higher Leverage & Lower Liquidation Penalties

Given the performance improvements of the oracles, we will be able to offer lower margin requirements, which means both higher maximum leverage as well as lower penalties when liquidated.

Start Trading Now

We are aiming to launch by the end of 2020. Until then, trade our BTC-USD and ETH-USD Perpetual Contracts for up to 10× leverage. Start trading here.

About dYdX

dYdX is building open, secure, and powerful financial products accessible globally. Trade Spot, Margin, and Perpetual Markets, with up to 10× leverage. dYdX runs on audited smart contracts on Ethereum, and enables trading with no intermediaries. It allows traders to move quickly, while maintaining full control of their assets.

About StarkWare

StarkWare develops ZKP technology to solve two of the biggest problems of blockchains: scalability and privacy. Focusing on scalability, StarkWare has the fastest in-class technology for asserting computational integrity via succinct, transparent, and post-quantum-secure proofs.