The dYdX token, associated with the decentralized derivatives exchange, experienced a nearly 7% increase, reaching $0.72, following the announcement of a buyback initiative. This program allocates 25% of the platform’s monthly protocol fees towards acquiring tokens from the market.
This strategy aims to enhance the token’s significance in terms of network security and its economic framework, especially in light of a substantial decline of over 78% in DYDX’s value over the past year.
The buyback initiative signifies a change in the distribution of protocol revenue, with 40% directed to stakers, 25% designated for this new buyback program, another 25% allocated to the MegaVault supporting market activities, and the remaining 10% reserved for treasury projects.
The exchange reported a net protocol revenue of $46 million for 2024, stemming from more than $270 billion in trading activity. Ongoing governance discussions consider the potential to increase the buyback allocation to as much as 100% of protocol fees.
Tokens acquired through this program are intended to be staked for an extended duration to bolster network security, as indicated by a representative from dYdX.
Additionally, the token’s supply dynamics are undergoing changes, with emissions set to be reduced by half starting in June. Most DYDX tokens have already been unlocked, with the rest expected to vest by mid-2026.
A proposed measure may also eliminate unbridged Ethereum-based DYDX tokens from circulation unless they are moved to the dYdX layer 1 by June.