2025-03-26
On March 24, 2025, Decentralized exchange dYdX has kicked
off its first-ever token buyback program, allocating 25% of net protocol fees
to monthly repurchases of DYDX tokens from open markets.
The tokens will be staked rather than
burned, aiming to enhance network security and reduce circulating supply.
This policy, approved by a community
vote, shifts dYdX’s fee distribution model for the first time. Revenue will now
be split as follows:
At current rates, the buyback program
could deploy $4.4 million annually, based on a $17.5M protocol revenue run-rate
(via DeFiLlama).
Community discussions are already
exploring raising the buyback allocation to as high as 100% of protocol fees,
which would significantly shrink token supply over time.
The announcement sent DYDX up over 8%,
trading above $0.71 and pushing its fully diluted valuation to $546 million.
This initiative comes ahead of a
planned 50% reduction in token emissions in June 2025.
As of March 1, 2025, 85% of tokens have
already been unlocked, with all unlocks concluding by June 2026.
Combined with feature rollouts like
Spot Trading, EVM Support, and the ongoing migration to its own Layer 1, dYdX
is realigning tokenomics to reflect its maturing protocol — with community
governance leading the charge.
dYdX Initially launched on Ethereum
blockchain in April 2019, the platform lets DeFi users to margin trade ERC-20
tokens.
It later added perpetual futures
contracts in 2023. It also transitioned from Ethereum to its custom Layer 1
network powered by Cosmos’ toolkit for extra speed and efficiency.
dYdX migrated to its own Cosmos-based
blockchain in October 2023. dYdX Chain supports decentralized perpetual
contracts, offering deep liquidity and advanced trading tools.
Users can stake DYDX tokens to secure
the network and participate in governance decision-making.
