• Major decentralized cryptocurrency exchange dYdX has quit Ethereum for Cosmos, choosing sovereignty over security. 
  • The derivatives exchange has launched its own blockchain within the Cosmos ecosystem, abandoning Ethereum in a bear market.
  • Analysts predict Ethereum price could drop below $1,000 as the largest altcoin begins downtrend. 

dYdX, a large decentralized exchange, has quit the Ethereum blockchain in favor of Cosmos, as the platform seeks sovereignty. The derivatives exchange launched a blockchain within Cosmos and promised the best experience to users. 

dYdX prefers Cosmos ecosystem over Ethereum

dYdX recently announced that it has called quits on the Ethereum ecosystem and launched its own blockchain within Cosmos. Antonio Juliano, founder and CEO of dYdX, said that the new blockchain will allow the decentralized exchange to offer the best experience to users. 

While quitting the Ethereum blockchain implies reduced security, the upside is the customized fee structures and higher transaction fees. dYdX’s platform was built on top of Ethereum using the scaling solution StarkWare, a zk-rollup technology. Despite the rollup, the core protocol was lagging and competition from other smart contract ecosystems increased exponentially. 

The exchange’s plan to quit Ethereum is viewed as evidence that the “world computer” is lagging behind. Competitors like Cardano, Solana, Polkadot and Avalanche are rapidly scaling to offer projects the solutions they seek in terms of faster transaction processing and lower cost. 

Ethereum is no longer fast enough to accommodate the demand of the rapidly growing DeFi ecosystem. Among DeFi projects, dYdX has earned recognition as the exchange that facilitates large trades without slippage. 

Automated market makers like Uniswap and SushiSwap suffer slippage, a common quirk for DeFi platforms. However, dYdX avoids slippage by using a traditional order book to facilitate swaps and directly links buyers and sellers of tokens and contracts. 

dYdX is a preferred exchange among institutional investors. 

dYdX chose sovereignty over security

Cosmos ecosystem is considered the right choice for blockchains that are built for specific use cases. Rather than one specific blockchain, Cosmos is a family of blockchains, and it facilitates quick and effective communication and swaps. Therefore, dYdX now has the freedom to set up parameters specific to a given use case. 

The creators of dYdX believe the new chain will allow the exchange to better optimize and handle the order book as the platform grows. Ethereum offers decentralized applications security that is extended to the entire ecosystem irrespective of the function of the dApp. However, this does not allow an exchange the freedom to adjust transaction fees in proportion to size. 

Dan Edlebeck, founder of Cosmos-based Sei Network, is quoted as saying, 

You can guarantee you are in more control of your chain itself.

Analysts predict Ethereum price dropping to $830 level

Analysts at FXStreet evaluated the Ethereum price chart and predicted a drop below the $1,000 level. Analysts believe the $830.93 level could come into play, a key support for Ethereum. Ethereum price could plummet by another 30% in the current bloodbath. 

@Phoenix_Ash3s, a leading crypto analyst, believes Ethereum price needs to hold above $1,000 for a reversal. A drop below $1,000 could imply continuation of the downtrend. 

ETH-USDT price chart

ETH-USDT price chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price edges close to a 60% breakout as bears watch in disbelief

Shiba Inu price has managed to stay above the POC at $0.0000118, indicating support from bulls. A continuation of this momentum could trigger a 60% rally to $0.0000200. A daily candlestick close below the $0.0000106 support level will invalidate the bullish thesis for SHIB.

More Shiba Inu news

XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price attempts a 15% rally on Ripple’s interest in buying Celsius' assets

XRP price shows a willingness to move above a significant resistance level, which it has attempted to do so for the past three months and failed each time. While this attempt is like any other and could fail, especially if the momentum is lacking. 

More Ripple news

Avalanche price makes a turn for the better

Avalanche price makes a turn for the better

Avalanche price shows classic ramping pattern accompanied with price ascension. AVAX price has breached the oversold level on the Relative Strength Index. If the technicals are correct, a breach of the $50 barrier could happen rapidly.

More Avalanche news

Binance Coin Price Prediction: Whales take naps at the shore

Binance Coin Price Prediction: Whales take naps at the shore

Binance coin shows reasons to believe in a market bottom. Traders should keep the smart contract giant on their watchlists throughout the summer. Binance coin price is beginning to show evidence of strength.

More Bitcoin news

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin price shows an interesting setup that could reveal its next move. On closer inspection,  its technicals support a bearish outlook for the leading crypto.  

Read full analysis