Long a pioneer in adopting next-generation blockchain architectures to support specific product outcomes, dYdX adopted Starkware’s rollup technology before L2s were in vogue, and with dYdX V4 they are adopting a standalone appchain model. Derivatives exchanges are by nature high-leverage and high-risk places of trade, and a maximally decentralized approach to the entire market structure is needed to ensure constant uptime and safety from manipulation.

A necessity for the success of the appchain approach is highly flexible, fast and easy-to-use interoperability. The dYdX chain needs to onboard users from rollups, Ethereum L1, other appchains and centralized exchanges in order to serve as many users as possible. This is where Squid and Axelar come in – an interoperability solution built for this purpose: single-click onboarding from any blockchain environment.

Want to learn more? Join Axelar, dYdX & Squid in a live AMA this Thursday at 4pm UTC.

What is dYdX

A decentralized marketplace for financial derivatives, and one of the oldest DeFi projects, dYdX has done over 1 trillion in volume in under three years.

What is Squid

Squid is a single-click, cross-chain transaction builder, supporting cross-chain swaps in under 20 seconds. Squid utilizes Axelar’s decentralized interoperability infrastructure, approved by Uniswap’s bridge provider assessment. Squid is providing interoperability services via an API, SDK and frontend developer tools to teams across 60+ chains, and has done over $200 million in volume since launch in January 2023.

The integration

To support single click on-boarding and off-boarding to their appchain from any of Squid’s supported chains or rollups, dYdX has implemented Squid’s API. Users will also be able to deposit from other exchanges, including centralized exchanges, to directly onboard onto dYdX’s chain. Users will be able to deposit into their dYdX account from within the dYdX frontend in one click, powered by Squid.

How it works

Goal: Deposit or withdraw to / from a dYdX margin account in any token on any chain.

Example 1:

User wants to get USDC margin on dYdX, they have USDC on Ethereum L1.

Route: USDC is sent to Osmosis via Axelar General Message Passing (GMP), then swapped to Noble USDC on Osmosis, bridged from Noble USDC to dYdX from Osmosis via the Noble chain. All in one click.

Example 2:

User wants to get USDC margin on dYdX, they have ETH on Arbitrum.

Route: ETH is swapped into axlUSDC on Kyberswap, axlUSDC is sent to Osmosis via Axelar GMP, axlUSDC swapped for Noble USDC on Osmosis, then bridged to dYdX from Osmosis via the Noble chain. All in one click.

This approach has become a blueprint for many of Squid’s other integrations, as it provides a robust architecture for scaling applications in a multichain world. Keep your complex, fragile logic in one tightly controlled environment that you control all edges of, and utilize smart interoperability to onboard or offboard and sell your capabilities in other ecosystems.

By keeping core business logic in your own environment, you are able to ship faster, build more scalable applications and innovate faster than your competitors, while not sacrificing for the total addressable market.

Want to learn more? Join Axelar, dYdX & Squid in a live AMA this Thursday at 4pm UTC.