DRC - V4 Adoption & DYDX Token Migration to dYdX Chain

[Callen_Wintermute]

Hi tane,

Thanks for this! We are still waiting on sufficient proposal power from the community/stakeholders. However, we are in active discussions to try to secure this!

[luisqa]

I think there is a misunderstanding here, perhaps in the wording or on my part.

Cosmos chains are secured by staking a token to a validator. This tokens themselves are locked (bonded/staked) for a minimum period of time to prevent attacks to the network, usually 14 days (sometimes more or less depending on each chain).

The wethdYdX token could be used to secure the chain OR the chain could be secured with a currently non-existent token native to cosmos. If wethdYdX is used, then first ethdYdX holders would need to permanently bridge their tokens and turn them into wethdYdX. There would not be a second token UNLESS the community decides to not use wethdYdX to secure the network.

Emissions on a chain are usually given in this token as well, emissions/rewards are what validators and stakers receive for locking their tokens and validators receive a % commission on those emissions. Many tokens from cosmos chains have suffered greatly because of high inflation at the beginning of a chain that eventually comes back and impacts price significantly. I would advise to set this inflation to 0% initially and raise it (after ample discussion) to a conservative 1-2% to help cover the costs of validating the network.

Will gladly expand further on this since this tokenomics design can make or break the dYdX token, not an expert by any means but have seen the good and the bad of tokenomics design in cosmos.

[Callen_Wintermute]

Hi @luisqa @Sisyphos,

I’m happy to explain further.

@Sisyphos

wethDYDX would govern v3, while v4 will be governed by DYDX on dYdX chain. Is that accurate?

This is correct!

@Sisyphos

Once on V4, I am assuming there will be new DYDX tokens distributed on dYdX chain. If so, does it mean wethDYDX and DYDX on V4 will go out of sync and become two different tokens as far as circulating supply means?

This is also correct. As inflation/emissions happen over time on V4, it is expected that there is a divergence in supply between native DYDX on the new dYdX Chain and wethDYDX on Ethereum mainnet. Technically, circulating supply between wethDYDX and DYDX will not be at parity to begin with given we expect that not all DYDX will be bridged straight away.

@luisqa

The wethdYdX token could be used to secure the chain OR the chain could be secured with a currently non-existent token native to cosmos. If wethdYdX is used, then first ethdYdX holders would need to permanently bridge their tokens and turn them into wethdYdX. There would not be a second token UNLESS the community decides to not use wethdYdX to secure the network.

This is exactly what this vote is about. DYDX will be accepted as the L1 token on the new DYDX chain. This implies there will be 3 sort of tokens:

1. regular DYDX on Ethereum mainnet that everyone is familiar with already.
2. wethDYDX that will help govern dYdX V3 and is given 1:1 with the regular DYDX that is bridged on Ethereum mainnet to the new DYDX Chain.
3. DYDX on the new dYdX Chain.

Token 3 will secure thew new DYDX chain, while tokens 1 & 2 will govern dYdX V3.

I hope this helps.

[luisqa]

Appreciate this Callen. It is abundantly clear now.

[tane]

Ah, my bad. You still need to have sufficient proposal power for its on-chain voting. Glad to hear you are in active discussions with potential parties!

[Sisyphos]

Thanks @Callen_Wintermute. Your reply was very clear.

It seems it is still pending confirmation whether V3 will continue to operate (supported by dYdX Trading or another party). Wouldn’t it compete with V4 for trading volume/users if it does?

Iiuc, sunsetting V3 seems the logical next step for V4’s sake. Am I missing something?
What would be the point of wethDYDX and the v3 delegates?

Please, lmk if I should be posting this somewhere else.

[Callen_Wintermute]

Hi everyone,

The on-chain vote to update dYdX’s V3 Governance System to accept wethDYDX is now live! Voting starts shortly here: dYdX Governance & Staking

If the vote is successful, dYdX’s V3 GovernanceStrategy contract will be updated to GovernanceStrategyV2 which we deployed before the vote. This new contract contains the logic to handle the governance accounting and logic of wethDYDX - which we have also deployed here.

Thanks!

[noblepeter2000]

was about voting earlier today when i saw a gas fee, which on my part was high. Why cant this on-chain voting be made gas-less? I would definitely vote, will just have to wait when gas is low. Thanks for informing the forum

[Callen_Wintermute]

Hey @noblepeter2000,

Thanks for the support on the vote, gas is always an issue with on-chain votes.

Luckily, you’re able to vote gasless using https://dydx.vote/ as you only have to sign a message and your gas will be sponsored by someone else!

[zocalo]

Thank you for information