US Crackdown on DeFi Leads To Full Decentralization‍

One of the most popular DeFi trading platforms, the cryptocurrency exchange dYdX, said that as US authorities tighten their inspection of the digital asset market, it is getting closer to being a truly decentralized operation.

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The exchange is establishing a testing network so that programmers may look for bugs before the official release of the upcoming edition of dYdX, which it claims as operating in a hybrid decentralized architecture. The exchange plans to launch the update in September.

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The upgraded network, also known as v4, or version four, aims to do away with the centralized corporations that are currently in charge of running the exchange. The exchange relies on dYdX Trading Inc. for order management and matching, and on StarkWare, a provider of blockchain technology, for some data handling related to transactions on the Ethereum network.

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Antonio Juliano, founder and CEO of dYdX, stated in an interview that he believes absolute decentralization must be the goal for everything in DeFi. "The middle ground truly doesn't work forever,"

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After the upgrade, dYdX Trading Inc. will keep making contributions to software creation. About 50 people work for DYdX Trading; their salaries will be covered by money the company got from earlier fundraising and trading commissions.

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Decentralized finance, or DeFi, aims to enable people to trade, lend, and borrow via applications without middlemen and frequently in an anonymous manner by using automated protocols. Yet, it has been questioned whether a lot of the protocols are genuinely in the hands of particular parties. As US Securities and Exchange Commission Chairman Gary Gensler recently stated that the majority of cryptocurrencies look to be securities and those that facilitate transactions must adhere to agency registration rules, this has become a bigger problem. 

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The SEC sent a notice last week informing the cryptocurrency exchange Coinbase Worldwide Inc. that it intended to take enforcement action. Sushi DAO, a decentralized autonomous organization, claimed that the SEC had subpoenaed it without providing a justification. Juliano claimed that many cryptocurrency companies had given up actively communicating with US regulators in light of Coinbase's predicament.

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The update was initially announced in January 2022 but was postponed for weeks. At that time, the organization also made public a deal to delay the release of some dYdX tokens between dYdX Trading, the nonprofit dYdX Foundation, and private investors. The exchange's name-brand token is primarily utilized for voting on project governance and trading fee reductions.

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