June 22, 2023
June 4, 2025

v4 Deep Dive: Governance

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v4 Deep Dive: Governancev4 Deep Dive: Governance

v4 Governance Deep Dive

As we approach the release of open-source software for v4 Mainnet (“dYdX Chain”), we want to provide a peek into what the dYdX team is building.This post discusses certain governance related design decisions for dYdX v4.

Given that v4 is still under development, please note that each of the topics discussed below is subject to change.

How does on-chain governance work?

dYdX Chain open source software will utilize the standard x/gov module within the Cosmos SDK. For an in depth breakdown of how the x/gov module works, head to the Cosmos SDK official documentation.

The dYdX Chain open source software will include certain required parameters of the governance module. The software will enable token holders to adjust any of the x/gov parameters via the governance voting processes.

What will governance control on-chain?

If deployed, the dYdX Chain software will allow governance (i.e., dYdX Chain layer 1 token holders, voting via the governance process) to alter the standard parameters across a variety of modules within the Cosmos SDK. The dYdX Chain software will utilize the standard Cosmos SDK modules listed in the official documentation, with the exception of Authz, Evidence, Feegrant, Mint, NFT, Circuit, and Genutil modules.

In addition to the modules included in the Cosmos SDK, dYdX is building a variety of modules that power trading functionality. Many of these modules have parameters that are adjustable by governance. dYdX Trading will not suggest or lead on-chain governance on dYdX Chain. All v4 modules will include initial parameters as part of the open source software.

A non-exhaustive list of parameters that governance will be able to adjust includes:

  • Add new markets
  • Adjust parameters of a live market
  • Remove any market
  • Edit the list of 3rd party price sources that the exchange uses
  • Fee schedule
  • Trading rewards mechanics
  • x/distribution module parameters affecting trading and gas fees
  • x/staking module parameters
  • Funding rate formula
  • Control of the insurance fund

Are there other, off-chain, aspects of governance?

There may be forums to discuss governance proposals and off-chain processes for submitting governance proposals that are enforced via social consensus. dYdX Trading will not suggest or lead any aspects of off-chain governance processes.

Legitimacy and Disclaimer

© 2025 dYdX International Ltd. All rights reserved.

dYdX is a decentralised, disintermediated and permissionless protocol, and is not available in the U.S. or to U.S. persons as well as for Restricted Persons as set out in the dYdX Software Terms of Use, accessible: https://dydx.exchange/v4-terms. dYdX International Ltd (“DI”) does not develop, control or participate in the operation of any component of the dYdX Protocol (including the MegaVault).

The information provided in this website is for general informational purposes only and DI reserves the right to update, modify, or amend any contents herein, at its sole discretion and without prior notice.  Nothing herein should be used or considered as legal, financial, tax, or any other advice, nor as an instruction or invitation to act in any way by anyone.

Engaging in any activity involving crypto-assets (including trading crypto assets and depositing into the MegaVault) is risky due to high volatility. Returns are not guaranteed and may fluctuate over time depending on multiple factors, and you may lose your entire investment, particularly when using leverage. Investment into crypto-assets may not be regulated and may not be suitable for retail investors. You should perform your own research and due diligence before engaging in any activity involving crypto-assets.

In no event will DI be liable for any loss or damage, including without limitation, indirect or consequential loss or damage, arising from or in connection with the use of this website. By continuing to access this website, you agree to the above and accept the possibility of changes in the information provided.

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© 2025 dYdX International Ltd. All rights reserved.

dYdX is a decentralised, disintermediated and permissionless protocol, and is not available in the U.S. or to U.S. persons as well as for Restricted Persons as set out in the dYdX Software Terms of Use, accessible: https://dydx.exchange/v4-terms. dYdX International Ltd (“DI”) does not develop, control or participate in the operation of any component of the dYdX Protocol (including the MegaVault).

The information provided in this website is for general informational purposes only and DI reserves the right to update, modify, or amend any contents herein, at its sole discretion and without prior notice.  Nothing herein should be used or considered as legal, financial, tax, or any other advice, nor as an instruction or invitation to act in any way by anyone.

Engaging in any activity involving crypto-assets (including trading crypto assets and depositing into the MegaVault) is risky due to high volatility. Returns are not guaranteed and may fluctuate over time depending on multiple factors, and you may lose your entire investment, particularly when using leverage. Investment into crypto-assets may not be regulated and may not be suitable for retail investors. You should perform your own research and due diligence before engaging in any activity involving crypto-assets.

In no event will DI be liable for any loss or damage, including without limitation, indirect or consequential loss or damage, arising from or in connection with the use of this website. By continuing to access this website, you agree to the above and accept the possibility of changes in the information provided.

Leaving site

By clicking ‘Continue’, you will be leaving https://www.dydx.xyz/ and accessing a website made available by a third party using dYdX v4 open-source software that is independent from and unaffiliated with dYdX International Ltd (“DI”). DI does not deploy or run dYdX v4 open-source software for public use, nor does it operate or control any or all parts of the infrastructure. DI is not responsible for any actions taken by independent third parties or for any codes, materials and contents on any third-party websites, including the one you would access by clicking ‘Continue’.

DI’s contents and services are not available to persons who are residents of, are located or incorporated in, or have a registered office in the U.S., Canada or any Restricted Persons as set out in the dYdX v4 open-source software Terms of Use, accessible here.  More details can be found in our Terms of Use. Learn more about dYdX v4 third-party front end options here.

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