An overview of migration of DYDX from Ethereum to the dYdX Chain.
The DYDX token is entirely controlled by the dYdX community, and it was ultimately up to the dYdX community to decide, through dYdX governance that DYDX should be the L1 protocol token of the dYdX Chain and how to effect any required token migration and/or any other necessary actions, as well as any other matters that affect or relate to the ethDYDX token or dYdX v3 Governance.
The dYdX Foundation urges the dYdX ecosystem, community members, and the general public to remain vigilant as we anticipate an increase in potential scams and phishing attacks via social media, messaging apps, and websites. Phishing is a common way for scammers to target internet users. Scammers may reach out to you on social media platforms pretending to be representing dYdX or affiliated with dYdX.
On August 3, 2021, dYdX Foundation launched DYDX (hereinafter "ethDYDX"), a governance token that allows the dYdX community to govern certain aspects of the dYdX Layer 2 protocol on Ethereum (“dYdX v3”) to align incentives between traders, liquidity providers, and partners. The ethDYDX token enables a robust ecosystem around governance, rewards, and staking - each of which is designed to drive future growth and decentralization of dYdX v3.
The dYdX Chain is a proof-of-stake blockchain network built using the Cosmos SDK and leveraging CometBFT for consensus.
The dYdX community, through dYdX governance, voted (Snapshot and on-chain) in favor of adopting DYDX as the Layer 1 token of the dYdX Chain for staking to validators in order to secure the chain and for stakers of the L1 token to govern
When interacted with, the one-way bridge smart contract, the wethDYDX Smart Contract, would carry out the following functions in a fully permissionless and automated manner:
Receive and permanently lock the ethDYDX tokens sent by the user to the wethDYDX Smart Contract,
Send wethDYDX to the user on a 1-1 proportion basis on Ethereum, and
dYdX Chain validators can also read and ingest the information in the wethDYDX Smart Contract such that corresponding DYDX can be distributed to users by validators on the dYdX Chain once there is confirmation that Step 1 above is complete and the respective ethDYDX is permanently locked in the wethDYDX Smart Contract.