dYdX, a cryptocurrency exchange, has launched a public testnet for its upcoming "v4" iteration, as announced by the exchange's development team on July 5. This milestone, known as "Milestone 4," marks a significant step towards the future launch of the v4 mainnet. The v4 version aims to enable complete decentralization of exchanges. Built on Ethereum and StarkEx networks, dYdX is considered a decentralized exchange (DEX) since it doesn't hold users' funds. However, it currently operates with a centralized or der book and matching engine for market makers, in contrast to automated market maker DEXes like Uniswap.
Version 4 of dYdX aims to eliminate the centralized order book and matching engine, transitioning the exchange to a fully decentralized model independent of automated market makers. The protocol will achieve this by running a portion of the application on a separate dYdX network with its own validators , enabling on-chain storage of order books. As part of the testnet launch, users can request testnet funds to explore the app, simulate trades, monitor profit and loss, and perform other basic exchange functions. However, the testing of bridging from one network to another is not yet available and will be implemented in a later phase via a public testnet.
Following the completion of the testnet phase, the protocol team plans to proceed to the fifth milestone of their roadmap. This includes integrating stablecoins into dYdX and incorporating support for Cosmos inter-blockchain communication, allowing Cosmos users to access the exchange application. The official launch of Version 4 is expected to occur after the completion of this final milestone.
In April, dYdX announced the discontinuation of its services in Canada due to regulatory concerns. In a previous promotion, new users were offered a $25 bounty for proving they were not robots, which drew criticism from privacy advocates. However, this promotion was later dropped .
