The decentralized trading exchange dYdX has launched a token buyback initiative aimed at bolstering network security and enhancing the functionality of its native token, DYDX.
In a statement released on March 24, the protocol announced its decision to dedicate 25% of its net monthly fees to purchasing DYDX tokens from the open market. These acquired tokens will be staked to directly strengthen the network’s resilience.
dYdX suggested that the buyback allocation may grow in the future, with the possibility of reaching 100% of protocol revenue if the initiative proves to be effective.
With the introduction of this buyback program, dYdX aligns itself with other notable DeFi projects employing similar strategies. Leading protocols like Aave and Jupiter are also exploring buybacks as a means to enhance their token utility and market performance.
Revenue distribution model
Additionally, the buyback program has led to a revision of dYdX’s revenue distribution framework.
Under this new model, staking rewards will account for 40% of total earnings, while the recently launched MegaVault and the buyback program will each receive 25%.
The remaining 10% will be allocated to the Treasury SubDAO, which is responsible for ensuring financial sustainability and long-term growth.
Following the announcement, the DYDX token witnessed an increase of over 8%, trading at approximately $0.73, based on available market data.
However, despite this recent surge, DYDX remains significantly lower than its peak of nearly $14.83, reflecting a decrease of about 78%.
DYDX tokenomics
This announcement regarding the buyback comes at a significant moment in the progression of DYDX’s tokenomics.
The protocol noted that its community successfully transitioned from Ethereum to its tailored Layer 1 blockchain, the dYdX Chain, in 2023.
After this transition, around 86% of its tokens now reside on the new network, while about 14% are still on Ethereum as ethDYDX tokens.
In light of this, the project has consistently encouraged users to migrate their ethDYDX tokens before June 2025, when the Ethereum bridge may cease operations. Failing to do so could result in unbridged tokens becoming inactive.
As of March 1, 2025, the decentralized protocol reported that it had already unlocked around 85% of the total DYDX token supply. Starting in June 2025, token emissions will be cut by 50%, with the final unlock set for June 2026.
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