The dYdX Chain will be a proof-of-stake blockchain network and, as such, if and when deployed on mainnet, it will require an L1 protocol token for staking to validators in order to secure the chain and for stakers of the L1 token to govern the network.
The dYdX community could elect to use DYDX, the governance token of dYdX v3, as the L1 token of the dYdX Chain (if and when deployed after mainnet release). If such an election were to materialize, given that DYDX is an Ethereum-based ERC-20 token, the DYDX token would need to be migrated from Ethereum to the dYdX Chain.
Thanks for compiling the course of actions to be taken to migrate the DYDX tokens to the new dYdX Chain. As @0xCLR said, we don’t see any reason not to use DYDX as the L1 token of the dYdX Chain either. If the dYdX community and core team were to introduce the new token, it would be good to check out how Polygon is planning to migrate their token (MATIC → POL).
We also have a couple of questions and comments:
the dYdX Foundation has undertaken two activities in connection with a potential migration of the DYDX token from Ethereum to the dYdX Chain. First, it commissioned the development of an Ethereum smart contract (the “Ethereum Smart Contract ”) that, if deployed, would enable a permissionless and autonomous one-way bridge for the DYDX token to be migrated from Ethereum to the dYdX Chain (as further described below)
We interpreted this as the work of those key components has already been commissioned and started. Sounds like it’s a “done” deal. At this point, we believe we can focus on how we achieve the migration smoothly. It’s not clear about who’s commissioned to work on them, though. Is it dYdX Trading or another undisclosed party?
(2) whether wethDYDX should have the same governance and utility functions as DYDX on dYdX v3
If we utilize wethDYDX for the governance purpose, the community could keep the delegates who are not validators but over time, it would become a “debt” to deal with in the future, which we believe is something we should avoid. They could only work as “honorable” tokens. Any utilities that we can think of?
(3) if the dYdX community decides DYDX should be the L1 protocol token of the dYdX Chain, then how to organize and carry out any required token migration and/or any other necessary actions.
We could form a working group or something equivalent to swiftly make actions while the group members are selected by the governance. This would work as an experiment to evaluate the council system that has been proposed in the past. Curious about the other community members think.
This is great and am looking forward to v4. Agreed, I dont no reason why DYDX shouldnt be the L1 token on the chain.
For wethDYDX, I only foresee the protocol wanting to keep the Ethereum version of it solely for the endorsed delegates unless there has been ideas on auth z that are already in the works. More of this can be found in previous discussions.
As for working groups on the migration, if the token bridge has not been decided, I have set up a similar post for consideration in the past : Bridging to v4. A working group to study followed by a vote will be great.
If possible, itd be great to discuss on why the bridge is only ‘one-way’ for DYDX tokens from ETH → DYDX Chain as well.