On January 23rd, the dYdX Foundation hosted a discussion on Discord regarding general updates, current governance proposals, and an Epoch 18 review. The discussion was followed by a community hangout and AMA with the dYdX Trading and Foundation teams.

James (dYdX Foundation):

So while Xiaomeng gets his mic sorted, we're following the same format as usual for everyone who's been here before. So we'll start with the dYdX Trading team, Xiaomeng, here. After that, Carl from the dYdX Grants team will go through everything about dYdX Grants, and Josh and I will run through some things from the dYdX Foundation side of things. You can see on the Foundation Discord announcement channel that Clifton shared some of the details on Epoch 18 in the AMA. So if you've had a chance to read through that deck, that'll be helpful. And if you haven't, we'd encourage you to read that in detail to understand the metrics, key data points and everything interesting around Epoch 18.

We're planning on changing things up a little for the next AMA. We'll have members of the dYdX DAO, active community members, active governance members, and participants like the dYdX Grants team, dYdX Trading team, and the Foundation team. And then we'll try and make this as structured, in terms of the timing of the sessions, as possible. We might do it through Google Meet or Riverside or some platform like that, so we can almost have a round table live service so that people can ask questions during the kind of live AMA at the end. We're thinking about sending a schedule and an agenda out to the community beforehand. And then they can come onto the call with questions pertaining to the dYdX DAO or trading foundation grants, et cetera in general, which is pretty exciting. Xiaomeng, can you hear us, and can you unmute yourself?

Xiaomeng (dYdX Trading):

Yeah, I can hear you guys now, yeah.

James (dYdX Foundation):

Fantastic, hi there. Cheers, thanks for coming on. Cool, let's kick off today with the dYdX trading team, then. Really appreciate you guys coming in today. I know you've been heads down building V4, so I appreciate you sharing some insight in relation to any questions to the trading team. I think this one is pretty self-explanatory, and people can probably check out the blog post. The first question that came in was, when is the private testnet launching?

Xiaomeng (dYdX Trading):

Yeah, right now, we're actually getting pretty close to the private testnet launch. So right now, we're roughly targeting somewhere, hopefully by early March or by the end of Q1 or the end of March at the latest, for launching the private testnet. That's the current timeline we're looking at right now. I think right now, most of the actual function for launching the private testnet is already code complete. And there are a few kinds of logistic infrastructure validators we have been active in, starting active, and rolling up as part of the logistics for setting up the private test net. So yeah, hopefully, we can get up sometime soon, I think in February or March.

James (dYdX Foundation):

Awesome, really excited about that, and I think everyone is super excited to see the progress there. The next question is, when can the community expect another sort of detailed blog post about the roadmap and updates?

Xiaomeng (dYdX Trading):

I think we're actually having one blog in the works right now, so it should be quite soon. I would say when we're getting close to launching a private test net, maybe in a few weeks or months or so.

James (dYdX Foundation):

Awesome.

Xiaomeng (dYdX Trading):

We’ll also include a refreshed timeline, everything there.

James (dYdX Foundation):

Brilliant. Some of the community have re-posted some images that have gone around Twitter. I think Everett was sharing some different types of user interface compared to the V3 product. I guess from everything that's being worked on, how different will the UI look compared to the V3 product today?

Xiaomeng (dYdX Trading):

So that's an interesting question. I have not seen those pictures yet. This may be coming from some of the portal techs we're building and testing internally. Our rough goal to start with is basically getting on par with these features and some of the UI workflows as well. It wouldn't be vastly different from the V3 product to start with. Of course, some of the workflows, I think, may be some of the later questions asked as well. If you're already onboarding, it will be somewhat different. But I think the major trading UI will be very similar to these realities to start with before we are putting more iteration on it.

James (dYdX Foundation):

Awesome. And then I think this question has been asked before, but what's the current thinking behind the process of onboarding to V4 through wallets, et cetera?

Xiaomeng (dYdX Trading):

This is another great question. So we have been working with Circle, which is the issuer and company behind USDC, and we’re working on bringing native USDC into the Cosmos ecosystem. I think they already announced that a couple of months ago. We’re building out the strategy of how the native USDC is building on Cosmos as well as how dYdX will be integrated with them. I think a lot of this work designing in terms of product design and workflow is still in flux at this moment. But the chord of this thinking right now is we'll be utilizing the native USDC that will be building and issuing on Cosmos very soon.

James (dYdX Foundation):

Super interesting. And I think these questions now are more specific to sort of features in the exchange. For V4, would it be possible to get custom alerts for individual order positions?

Xiaomeng (dYdX Trading):

Yes. So I'm not exactly sure of the understanding of this question, but my guess is basically creating a customer threshold and creating some custom configuration for alerts on order position. So my answer on this is something I don't think is going to be baked into the initial V4 launch. But of course, our V4 product will be open source. Everyone can build on it, and this is certainly possible on that. Either the community or we should be able to easily add in the future.

James (dYdX Foundation):

Okay, brilliant. Has there been any more thought into any addition of spot markets post-V4 launch?

Xiaomeng (dYdX Trading):

Yeah, I think this is something we're still discussing internally. I know there has been a lot of discussion around the product and strategy about the future of spot markets or other features post-V4 launch. I don't think anything has been in the concrete plan yet. It's still in the very early stages. There has been discussion around it, but I don't think there has been a concrete plan made yet.

James (dYdX Foundation):

Okay, that makes sense. Thanks for that. Moving onto private test net, is there any kind of public, available information about the requirements for validators on test net?

Xiaomeng (dYdX Trading):

Yeah, so I think I mentioned this during the last Epoch review. So there are a couple of things we're looking for, working with validators for the private testnet. First of all, the private testnet will be a handful of selected validators that we choose to work with us. So a lot of the qualities we're looking for is Cosmos experience. Have people run Cosmos validators before, on Osmosis etc. This is another big exchange in Cosmos, and because we do believe that experience is important. The other factor we are looking for is also if the validator team has a dedicated buffer to work with because this is actually the first time we're going to spin up a chain. We have run our own validators before, but I think some dedicated efforts and working with some and having the time and location are just good for finding issues. Those are the two major factors. There are a few other factors as well, based on our past working experience with other validators. But yeah, so mostly, it's based on that.

So this is our plan for the private testnet launch. For the public testnet, this will basically be permission-less. So everyone can run it in the future.

James (dYdX Foundation):

Yeah, that makes sense. Thanks for that. I’m not sure if it's even kind of answerable from you guys yet. What UI/UX improvements can we expect as traders before launch?

Xiaomeng (dYdX Trading):

That's a good question. I think I'll maybe leave that to Corey to answer next time. But so far, as I mentioned in another question, the first initial goal is to reach some parity through V3 and then to keep improving on that. So there will be plentiful of UX improvement after the V4 launch, but it's not something we're prioritizing right now. I think Corey from the product team probably has more insights to share on this than me.

James (dYdX Foundation):

Okay, that's brilliant. No, we'll save that for him next week. One question here about gas costs, Xiaomeng. When dYdX transitions to Cosmos, will each trade be a transaction with gas costs?

Xiaomeng (dYdX Trading):

I think this is also mentioned in the initial blog that Antonio released for the launching of the dYdX exchange. So there will be no kind of gas fee related to the dYdX V4.

James (dYdX Foundation):

Awesome. Last question related to the V4 is, will the order book be on-chain or off-chain?

Xiaomeng (dYdX Trading):

Sorry, before I answer this question, I just want to go back quickly on the gas cost. So I think it was true, the case that there will be no gas costs is for most of the trades. There are certain things we're still in the design phase right now, which we're still kind of finalizing on some of the gas questions and other things. So those are subject to change but it's still TBD. For the majority of the recorded trades, there's no gas cost. Just want to clarify that.

To the next question, whether the order book will be on-chain or off-chain, it will be off-chain. So this is also mentioned in our recent dYdX blog post, why we're building an off-chain order book plus an on-chain consensus. The main reason behind this, so off-chain, we believe that off-chain order book is basically a way for scaling up the system in terms of the performance of the chain and using the mem-pool

James (dYdX Foundation):

Awesome, Xiaomeng. I really appreciate your time in answering those questions. That's really helpful. That's everything from dYdX trading-related questions. I think the next thing would be if anyone wants a POAP from this Epoch 18 review and AMA, head into the general trading channel. Alucard will be posting a link to claim your POAP. So the secret word is Cosmos. So head in there, and click on the claim form. The secret word is Cosmos, and then you can get your POAP for this Epoch review. Great, Carl, to you, sir. So talking through dYdX grants, I guess it would be great for you to touch on the 1.5 and the kind of progress being made there.

Carl (dYdX Grants):

Yeah, for sure. So things are going really well on the grants side. We still had a great number of applications come in and just generally a lot of interest from contributors to the space. And we're finding some great opportunities both on the community initiative side, on the research side and on international growth. But obviously, the keen observer of grants will have noticed we've had some smaller rounds on the last few approvals. So that isn't necessarily a reflection of the activity or interest in the grants program and the number of contributors that we find out there. It's more so a reflection of our kind of strategy shift to focus on really high-impact initiatives that remained relevant in the V4 setting. Obviously, the closer we get to V4, given the testnet, the more aware and careful we become of making sure our grants remain fully relevant in the new chain, given the short proximity of that launch. And on top of that, a pretty big chunk of our budget for V1.5 was allocated towards international growth as a way of expanding awareness and kind of using our growth and user onboarding across different communities through typical marketing initiatives and kind of grant growth efforts. And in the market that we've had these past few months, opportunities like that tend to slim down, just because either people aren't really looking to do DeFi stuff anymore, or the ones who are, it doesn't really drive impact for dYdX, because it actually can be detrimental, if you suddenly affiliate yourself with generally negative sentiment and negative news, and the dYdX branding is there. It's not the result that we're looking for, and so we've been very careful on the international growth side of things. We have some good ones, actually - the CoinAcademy one recently and some great local initiatives as well. But yeah, I think overall, we're still very happy, and we're super excited to keep it going.

James (dYdX Foundation):

Brill, thanks, Carl. Lastly, has the appetite changed for grantees interested in building since the FTX drama? How has that affected you? I know sentiments changed in that sense but in terms of applications that have come into the dYdX grants team or anywhere else, what has the appetite been like?

Carl (dYdX Grants):

Yeah, no, we don't really see a big change there, honestly. If anything, there was an expansion in interest for dYdX, given that we were active in general. People recognize the fact that it's time to wise up and start using a DEX instead of relying on these centralized exchanges. dYdX, being the main brand that it is, became the go-to place. And that carried across the builders and contributors and kind of people that we see on the grant side of things as well. So it's been great, generally speaking, on the application count. You could see on the dashboard there hasn't really been a drop. It's been pretty consistent in the fall and into the new year. And we're seeing a pickup in January, actually. I've started the applications for the past couple of months, even though we have some time left in the month. And yeah, and then our existing grantees and other team members are aware, kind of expressed interest, are fully head sound and solely focused on delivering their milestones and everything. We haven't ever seen anybody drop off as a result. So, I'd say bullish dYdX builders.

James (dYdX Foundation):

Awesome, appreciate that, Carl. Thanks for sharing that. Sweet, okay, onto the Foundation team, so Josh and I. This one for you, Josh, more broadly, but what's the main focus for the dYdX Foundation heading into 2023?

Josh (dYdX Foundation):

Sure, happy to take it. I think taking a step back since we built out our leadership team, we hired Charles d’Haussy a few months ago and was really able to give, I think, some strategic direction to the Foundation. And the team has penned out a specific mission and vision. So the mission is to focus on democratizing access to financial opportunity. And the vision is essentially how that is achieved, which is supporting and growing the dYdX ecosystem by enabling contracts, developers and decentralized governance. So I think in support of the vision, you can really break down the foundation’s activities into a handful of areas, six to be specific. So I think instead of getting into specifics, the dYdX Foundation for 2023 really has a number of different kinds of objectives and specific targets in areas of focus. And instead of getting in there, I think the nitty gritty, I can just name off the areas of focus. But I think the Foundation plays a large role in DAO development and enablement as well as protocol governance, enhancing user support, focusing on dYdX V4 partners and trying to build out the potential pipeline for when test net is released.

I think a large portion of the foundation team is focused on the dYdX brand. A lot of DAO initiatives focused on education, as well as inferring that dYdX as a protocol is known in the ecosystem. Finally, I think one of the most important ones is dYdX community enablement, which I think 2022 was a super interesting year for community enablement. The Foundation team was able to pilot an ambassador program, dYdX Academy, and dYdX Merch. I mean, the list goes on and on. I think seeing two different super prominent sub-DAOs come to fruition in 2022 is also super promising in the ecosystem. So going to be doubling down on more of the same, and I think, a little bit more targeted in our approach for 2023 and really kind of gearing up for the dYdX V4 test net as well as the main net launch, which we're super excited for. I don't know if you wanted to add anything there, James.

James (dYdX Foundation):

No, I think that covers everything. Thanks, Josh. So the next question is, are there any new community initiatives people can get involved in? I think with this question, there are. So currently, Alucard and I have created some dYdX quests. So I think a few of you come in here through the dYdX quests. Essentially we're going to keep updating that, adding different quests over time. And essentially, if you complete quests, and they're deemed to be, let's say, of good quality and good standard, then you'll get rewarded XP points that either go towards Merch or an NFT or give you some kind of reputation points within the immediate ecosystem, which is great. There has been some discussion around trying out a new Ambassador Program. In a broad capacity, that was the same as before but maybe a smaller capacity, where we immerse some governance-related Ambassadors into the Cosmos ecosystem, where they go into different protocols and provide feedback on what's going well, what are the struggles, what are the difficulties etc. Engaging with the communities in those different ecosystems and just almost like a public good, per se, where they build up the reputation of the dYdX community. And there's definitely a number of people within our immediate ecosystem that are of that quality and have that capability. So excited to get something out there. It might not be for another six weeks or so, but these are just initial thoughts on what potentially could be launched. And again, I think what may come involved, and it's more for Carl and co to decide with the dYdX Academy, is people may start to contribute from a written standpoint, education standpoint on how they can really develop the ecosystem from an educational side of things. So excited about everything that's going on in the community from a community standpoint. And if anyone has got any other suggestions on either initiative that we could be running to get you all involved or quests in general, then either DM Alucard or me, and we can try and take that into consideration. Cool, next question. This is probably to you, Josh, as well. But are any proposals that are currently active that the community should be paying attention to?

Josh (dYdX Foundation):

Yeah, for sure. Great question. I think I’ll punt talking about the Ops subDAO for a little bit later. Maybe we can get Carl to give an update as well. In terms of active proposals, not a lot is going on in governance currently. A few, I think, DRCs that are quite interesting or one specifically which both 0xCchan and 0xCLR recently submitted about trading fee optimization, which is a super in-depth research report. I think if you don't have time to review the whole thing, they've also posted a summary on Commonwealth, a tl;dr summary, which I think gives a pretty nice overview. And essentially, the main point, I guess, of the research report was to position the dYdX community in the right way when it comes to trading fees, just because, essentially, trading fees are going to be decided by token holders in V4. And then, I guess, the tl;dr summary and main recommendations provided by the research team are quite strong.

I think it's important for the dYdX community to start thinking about what everything is going to look like come V4, just because, again, it's going to be totally open sourced and totally permissionless. Just in terms of the main finding, I thought it is super interesting just in terms of the analysis that they did, which is kind of looking back over different fees and how traders interact with the exchange. The main finding I think that I found the most interesting was just the sticky behavior that larger traders are demonstrating, epoch over epoch, no matter what the change in fees are. And on a positive side note, I think you see a larger amount of larger whales or traders doing large amounts of volume on dYdX. That proportion of traders is also increasing, which I think is a good thing.

It's nice to see that there is some stickiness in the larger users, which is super solid. And in terms of the operation subDAO also, the ops subDAO team has recently shared a website with the community just to be more transparent with updates. Carl, I don't know if you want to jump in there and talk about recent updates or not.

Carl (dYdX Grants):

Yeah, for sure, happy to. Yeah, so the website, dYdXopsDAO.com, is very simple, obviously. We don't need to fluff it up or ask to pay somebody to create a website for us. We thought we'd just keep it simple for everybody. This is a quick reminder. The Ops subDAO was launched in order to build a DAO playbook to help guide the community in launching these subDAOs and kind of determining the best way to form one and which legal entity to choose, what responsibilities should be done, how to launch and how to organize it. It's kind of everything, so the goal is to provide a step-by-step guide that's going to help all of us as a community determine when, how, and why we should launch future sub-DAOs in order to manage the protocol from a decentralized standpoint. So that's in the works right now. If you head to their website, you can look at the flow that we created in order to be able to track our building of the playbook. The goal is to have the draft for the community ready by early March, basically.

So we've got our heads down on that one, and then at the same time, the Ops subDAO is also responsible for opening a fiat bank account so that we can take control of paying for certain providers like Arc or Discord, whatever else the community wants to use. Went through grants where you set up to gather talent space as well, which right now is being paid through grants to maintain. But eventually, maybe that could be done through that subDAO as well. Any number of things in the future, but these are all providers who don't accept crypto, obviously, because they're not quite there yet. We went ahead and converted the DYDX into USDC. Then we'll deposit that into bank accounts where we can pay for these tools that will enable the continued growth of protocol management on behalf of active contributors. So then we can kind of improve day-to-day functionalities for everybody as we look to scale the DAO. Otherwise, on the website, you can find useful information like our balance sheet and the trust agreement.

We'll start to upload statements, bank statements and stuff like that as we have a bank account. A quick update on the bank account is that we are in the process of onboarding with a bank that we've found. And so, obviously, banks are super slow. I joined crypto to get away from them. Here we are, working with one again. But it is what it is, and then at least we're onboarding. And we're optimistic that that should get done. Yeah, I think that pretty much brings us up to speed on the ops subDAO.

James (dYdX Foundation):

Awesome, thanks, Carl. I appreciate that update. Lastly then, Josh, for you, I guess, has there been anything recent coming up on the forums or anything about the token migration of the DYDX token to Cosmos or anything?

Josh (dYdX Foundation):

Happy to answer, yeah. I think first things first; it's not set in stone what the token for dYdX V4 is going to be. That is going to be totally up to the dYdX community. DYDX is the token on V3 currently, and a token is required on V4 for staking and delegating to validators. But everything in terms of what that token is going to be and if there is going to be a migration necessary is going to be community initiated and really coming from the community. So to date, I think we've seen a few comments in the forums about potential bridging methods or how to go about migrating the token over. But there hasn't been a formal DRC yet.

And I think in the event that somebody was interested in putting a proposal together for DYDX to be migrated or a new token to be the staking token, we're in a difficult position right now, just because for the migration to take place, you need both chains to be operational. And so I would say we're kind of in an in-between period right now. But I anticipate it will be something that comes kind of into the community's purview and comes to the forefront of people's minds in the upcoming months, as we get closer to the test net.

James (dYdX Foundation):

Brilliant, appreciate that update. Cool, that's everyone from a speaker standpoint. I guess now we can open up the floor to any questions related to any of us. So if anyone has got any questions, please raise your hand. And we've got about 10, 15 minutes that we can answer any questions. Whilst we're waiting, there we go.

dYdX Community Member 1:

Can you hear me now?

James (dYdX Foundation):

Yeah, perfect.

dYdX Community Member 1:

Yeah, okay.

Hi, guys. I just wanted to ask a question about V4, if the token unlock is still happening as planned, as there's been quite a lot of talk in the market that the V4 has been slightly delayed?

Josh (dYdX Foundation):

Hey, I'm happy to jump in there. So from my understanding, still going ahead as is stated in the governance documents.

James (dYdX Foundation):

Anyone else have any questions? There are a few in the forums currently. So there's one which might be more for you, Xiaomeng. I'm not sure you'll be able to answer this accurately, but since fees will be accrued to validate in stakers in V4, what can we expect yields to be? That's just one question. I'm not sure if that can possibly be answered yet, but I'm just throwing that out there.

Xiaomeng (dYdX Trading):

Yeah, I think this is something it's still being discussed. We haven't got any, I guess, in the final stage for this yet. But we'll definitely publish more when we're getting close.

James (dYdX Foundation):

Fantastic, thank you. Cool, anyone else? Mo, okay, Brill, I'll bring you up. Hey, Mo.

Moe_L (dYdX Community Member):

Can you hear me?

James (dYdX Foundation):

Yeah, got you.

Moe_L (dYdX Community Member):

Yeah, hi. Okay, so a question regarding Hedgies. Have there been any discussions about alternatives for bringing the hedges to the new chain? That's one question. The other question is about the off-chain order book. Does that mean that it's not going to be fully decentralized? Thank you.

James (dYdX Foundation):

Xiaomeng, I guess that one would be for you from the order book perspective.

Xiaomeng (dYdX Trading):

Yeah, I can talk about the order book. Actually, I don't have any visibility on the hedgie part. I'm not sure if anyone else, or maybe in the future, the host from the trading site, can answer the hedging question. So on the other parts, so I think the answer is no. It will be fully decentralized. So, first of all, the order book will be running and maintained by validators within the network. We'll be hosting every single validator on the chain, so it will be fully decentralized. And the main way that we're doing kind of the off-chain order book is for scaling the overall performance of the system. But essentially, every validator will get a copy of the off-chain order book and help maintain the consensus on it as well. So it will be fully decentralized in that way.

Moe_L (dYdX Community Member):

I see. Thank you.

James (dYdX Foundation):

Thanks, Mo. In terms of the Hedgie side of things, I know that's something that probably I, from the Foundation side of it, can't answer accurately. But I think one thing that you can potentially do, I'd encourage you to continue to post on Commonwealth and the forums with the justifications of why they should play a role in V4, how it's built a community from a dYdX trader standpoint, some of the benefits it's given to users to date. I know it's a lot of effort from the community standpoint, but as with all these things, we definitely need to justify the impact. It's hard on everyone in the ecosystem. Cool, last question, last two questions. Immutable Lawyer, we'll get you up first, and then we'll get Jamie up. Hey, mate.

Immutable Lawyer (dYdX Community Member):

Hi, guys. I hope you are well, first of all. Just a couple of points or questions as well from my end, curiosity about V4, actually. With regards, first of all, 2 Hedgies, Nick and Andy, and I have actually submitted a grant. Part of it was actually in line with this Hedgie implementation. I would say trying to implement Hedgie usage in V4 either by a ranking system, sweat equity, et cetera, because I think that an important part in the sort of cult-to-culture mentality in the crypto industry, that's where you've seen, I think, having something cult-like such as your own NFT collection is beneficial to attract users. So I think doing away with the Hedgies for V4 would be, I think, a bad idea. It would be a net negative, so to speak, but that's just my opinion, something I'm keen to look into. And we're looking into it also and discussing it in our own private chats. Another question I had with regard to validators, actually, was the barrier to entry from a cost perspective for running your own

validator and whether they have any validators lined up as of yet.

Xiaomeng (dYdX Trading):

Yeah, I think in terms of the validator plan, we do. So I think there has been a pretty good amount of validators reaching out to us. I think the last time I checked, it's probably around 30 to 40 validators. We haven't spoken since then about planning for the private testnet. We'll likely be choosing; I don't know the exact number yet, but maybe something close to 10 validators based on the selection criteria mentioned. Yeah, so that's the rough plan. I didn't hear the first part of the question. Can you repeat it again?

Immutable Lawyer (dYdX Community Member):

The first question was the barrier to entry from a cost perspective. So what would be the cost of running your own validator on the dYdX chain from a dollar perspective, dollar-denominated perspective, for example?

Xiaomeng (dYdX Trading):

I see. We don't have some complete data on this, but we are actually getting close to starting onboarding validators separately for some real runs for the private test net. So we can share more data later on once we get that.

Immutable Lawyer (dYdX Community Member):

Thanks a lot. I just have two minor questions, if it's okay. I don't know if anyone has their hand raised.

James (dYdX Foundation):

Yeah, go ahead.

Immutable Lawyer (dYdX Community Member):

So an ultimate question of mine relates to a point Josh mentioned, actually. So Josh, if I understand correctly, it's in the hands of the community to actually migrate the DYDX token to V4. So if we could actually work on a proposal, that would be, subsequently, eventually, a DRC. It has to be community led to migrate the token to V4. Because if so, maybe it will be something interesting to work on, actually.

Josh (dYdX Foundation):

Yeah, for sure; happy to jump there. Yeah, I guess just reiterating kind of what I said previously, the choice of token on the new chain is going to be up to the community. It comes, I think, with dYdX fee forming, totally open source, totally permission-less, totally decentralized. But yeah, happy to chat further if you have any specific questions. But the governance lifecycle definitely would need to be followed. So DRC and temperature check in terms of snapshot post after there's some amount of consensus established if that is accessible, then depending on what the crux of the proposal is going to be and likely short time lock. Or yeah, likely a short time lock vote.

Immutable Lawyer (dYdX Community Member):

Thanks a lot, Josh. My last question actually relates to decentralization from a general overview perspective. And I'll split it into whether we have any insight for the governance framework on Cosmos, on V4, or whether we'll actually be using the Ethereum one and then maybe transposing the proposals that are passed to Cosmos. I have no clue about this. Maybe it's also community-led about the transition of the token. And secondly, are there any efforts or plans actually to reassess either the token or the overall decentralization of the protocol when we go to V4? Because naturally, going from Ethereum to your own chain, which is validator centric, will undoubtedly affect the level of decentralization of the protocol. So those are my last two questions, so whether that will be assessed with regards to decentralization, which will also affect the classification of the token from a US perspective, for example, in light of securities laws. And the other part was with regards to governance, will this change or rather deliver feedback based on reviews from Ethereum governance.

Josh (dYdX Foundation):

For sure, yeah. I think, Xiaomeng, do you want to jump in just in terms of plans for governance as it relates to the milestones on V4?

Xiaomeng (dYdX Trading):

Yeah, so right now, the governance implementation is scheduled for milestone four, which is the public testing launch. It's going to be one of the major things we'll plan to tackle after the private test launch in March. So this is something actually has been actively scoped out by our product team right now. Yeah, I don't have too much to share. Again, this is; still, I think, working in progress. But this is something the team is actively working on. I think it would be likely to provide more information than that blog post. And also I'm happy to get Corey on the next call as well. I think he has been the main PM working on scoping out the governance migration and everything. So I think he can share more details in the future AMA on this.

Josh (dYdX Foundation):

Appreciate that, Xiaomeng. Going back to your other question just in terms of what governance and decentralization is going to look like, stay tuned. Just the Foundation is currently working on a retroactive analysis of what governance on ETH has been like so far in V3. The governance team is doing some deep dives on the Cosmos ecosystem as well as a ton of other ecosystems just to see and look at best use cases for what is working in governance and what is not working in governance to try to improve in terms of getting things done quickly and efficiently but also ensuring they're done in a decentralized manner.

So, in short, I would say that there's total room for changing the structure of governance. From my understanding, it's going to depend a lot on what the initial version of governance looks like and how the community decides to proceed from there. I think one of the things that have come to mind recently is the importance of potentially having a charter or code of conduct just to ensure that the protocol is going to govern itself correctly and to understand what type of decisions the community would make and what's on the table. I think the Juno system is a super good example of that, where somebody actually had their tokens slashed. So kind of up to the community, I think, on a lot of fronts just in terms of reframing and making suggestions in terms of what governance is going to look like.

I mean, the technical implementation is going to be, as we say, or as dYdX trading states, fully decentralized. But I totally agree with you that the way that the DAO is going to be structured after that also needs to be constructed in a decentralized manner. But I think it is particularly interesting about the Cosmos ecosystem as well as the potential use case for group modules in addition to the gov module in the Cosmos SDK. I won't go on any further just because I've been rambling for a little bit. But I hope that answers your question.

Immutable Lawyer (dYdX Community Member):

No worries at all. I think, on that point, there are also some interesting things to play around with, with regard to liquid staking. Because overall, and this is just a side note to conclude from my end, I think what I've seen thus far is the structure maybe was a bit too complicated for users to understand. And that may sometimes lead to less participation over time or no participation from certain holders. I think simplifying it while maybe keeping it complex at the back end but not showing that complexity, which is what some other protocols have managed to do, such as temple, perpetual protocol, et cetera, et cetera, I think would help. But naturally, on Cosmos, it's an entirely different beast that I'm still studying myself. So I will post my thoughts on the general chat should I come across anything interesting. Thanks a lot for the reply, guys.

Josh (dYdX Foundation):

Yeah, totally. I would definitely encourage you, Immutable Lawyer. Definitely make active use of the Commonwealth threads. Maybe usually keep a pretty close eye on interesting discussions and interesting points that are going on there, so would encourage you to post your thoughts and let the discussion build after that. Thanks for your questions.

James (dYdX Foundation):

Yeah, thanks, Immutable Lawyer. Jamie, how are you doing?

Jamie (dYdX Community Member):

Yeah, hi. Just from a developer's perspective, what is going to be the impact on the APIs, web sockets and the client from V3 to V4? And what's going to be the sort of migration time on it?

Xiaomeng (dYdX Trading):

I can take a stab at this. So I think when we're building out V4, the overall API and the web socket, we're basically working to achieve at least a parity of it in terms of the major functions. So I think as a part of the public testnet, we'll be rolling out most of the API and web socket as well. Of course, right now, a lot of the web socket is already being used for supporting the front end as part of the private testnet. Yes, I guess to simply find the answer, so we're working to create some parity under those APIs and the client comparing with V3 in V4. And I think there will be more details and more functionality we'll be rolling out in the public test nets. And we're already starting to test the major APIs, public APIs and the web socket during the private test net as well.

Jamie (dYdX Community Member):

So it might just be a case of changing the endpoint from V3 to V4, as an example.

Xiaomeng (dYdX Trading):

I'm sorry, can you repeat it again?

Jamie (dYdX Community Member):

Yeah, so it might just be a case if you can get that parity, so with the endpoints, we'd just change V3 to V4, as an example. We're not going to have to rebuild the whole infrastructure around completely different functionalities.

Xiaomeng (dYdX Trading):

Yeah, I think the API itself is actually going to be very similar to V3. I think it depends on the exact use case. I think how much migration efforts will be needed will still be evaluated. But I think that's pretty much the goal, providing a very similar set of API and web socket so that the user can easily migrate it if there are any efforts to that. We are actually planning also to publish some more details of the API docs and web socket docs, potentially in the milestone. So yeah, looking out for more details there as well.

Jamie (dYdX Community Member):

Awesome, thank you.

James (dYdX Foundation):

Thanks, Jamie. Brilliant, okay, we'll have to close that up there. Thanks for the questions, everyone in the audience. That was just really great to see so many insightful questions. Thanks, Carl, Xiaomeng, and Josh, for coming on and answering those. Lastly, really appreciative of seeing all the feedback and support in all channels. It's really valuable and something that I think both the trading and foundation and grants teams take on board. If there are any other questions or any more information, feel free to put them into the Discord general channel, and I can ask Jaoming or others for some answers there. So we'll end on that note. As usual, this will be deciphered. We'll post it as soon as we can. It'll go onto YouTube, and we'll post it on the Discord channel. There's usually a process in the background where we'll transcribe everything into written content. We'll keep you updated as soon as this is ready. Have a great week all, and catch you next time.