How dYdX powers frictionless cross-chain interoperability with Turnkey

Learn how this high-growth decentralized trading platform automatically bridges user funds from EVM to Cosmos through Turnkey’s secure, non-custodial embedded wallets.

• 1.6K+ bridging transactions processed
• $400K in funds bridged within a month
• 6 weeks to full integration

“Turnkey helps bridge assets across EVM and Cosmos in a way that's completely invisible to users. That level of blockchain interoperability is what drives continuous adoption.” — Kefan Cao, Software Engineer at dYdX Labs

About

The dYdX protocol consists of fully open-sourced code that permits completely on-chain self-custodial order book-based trading of perpetual derivatives, supported by a dedicated Layer-1 blockchain that leverages the Cosmos Software Development Kit. Founded in 2017, the dYdX protocol has processed over a trillion dollars in cumulative volume and is among the largest DeFi derivatives platforms by daily activity and open interest. 

Challenge

Abstracting cross-chain complexities to drive user adoption

The dYdX protocol is a Layer-1 blockchain that was built using the Cosmos SDK, enabling the protocol to achieve 2,000+ TPS with zero gas fees and instant finality. 

While this structure delivers significantly more performant and seamless trading flows compared to Ethereum-based DEXs, bridging the cross-chain gap between EVM and Cosmos was a significant hurdle to adoption.

Protocol users would need to bridge funds across chains to start trading. Not only was this a friction-heavy process (even for veteran traders), but it also exposed users to bridge risks and delays that weren’t present on pure EVM platforms. 

Turnkey provided dYdX protocol users with a secure wallet provider and a flexible policy engine to automate non-custodial bridging at scale.

"Every user gets a wallet that belongs to them, and we never touch their keys," Kefan explains. “That architecture enables dYdX to automate cross-chain deposits at scale without taking on custody of user funds.”‍

Solution

Solidifying cross-chain interoperability with Turnkey

Turnkey became the wallet and policy layer behind dYdX, enabling users to move funds from EVM to Cosmos while retaining the platform’s non-custodial status.

Implementation was quick and collaborative. dYdX Labs worked with Turnkey’s engineers and security leadership to stand up an MVP within 6 weeks, reducing technical overhead and time-to-value. 

“The Turnkey team was very eager to help when it came to the integration,” Kefan Cao, Software Engineer at dYdX Labs, shares. “Across the board, they’ve been extremely helpful in taking this effort from zero to one.”

Turnkey’s Embedded Wallets act as external EVM addresses that users can send funds to, and automatically trigger bridging to the Cosmos dYdX chain.

This frictionless experience extends beyond automated bridging flows. With email- and social-based account creation, even users who only hold wallets within centralized exchanges can onboard and start trading within minutes. 

If a user loses access to their wallet, Turnkey’s native, email-based recovery flows help them recover funds, no seed phrase management required. This end-to-end simplification of the user journey has already driven tens of thousands of app downloads.

"With Turnkey, the user can execute a bridge without having to click ‘authorize' every time. Their permissioning systems not only secure our non-custodial status, but also make each user interaction that much easier."

Results

Frictionless onboarding flows that accelerate adoption

With Turnkey, dYdX capitalizes on the performance benefits of Cosmos without requiring its users to overcome the upfront hurdles of cross-chain asset bridging. 

Today, traders access the dYdX trading environment as a unified experience, with bridging automated through narrowly scoped, non-custodial policies.

• 1.6K+ bridging transactions processed
• $400K in funds bridged within a month
• 6 weeks to full integration

As dYdX expands, Turnkey’s wallet creation, policy enforcement, and bridge automation will play a pivotal role in supporting that rollout.

“With Turnkey powering our wallet infrastructure, we're eager to launch more features with the same seamless experience our users demand.”

‍