TL;DR
- dYdX has launched a token buyback program to strengthen network security and improve the utility of its native token.
- 25% of the protocol’s monthly net fees will be allocated to token buybacks, with the tokens being staked to enhance the network’s resilience.
- The community has shown interest in increasing the proportion of revenue allocated to buybacks, which could reduce token circulation and improve its value.
dYdX has launched a token buyback program with the goal of strengthening the security of its network and improving the utility of its native token.
According to the announcement, the platform will allocate 25% of its monthly net fees to buy tokens on the open market. The acquired tokens will be staked to increase the network’s resilience.
This program is part of a strategy to improve DYDX’s tokenomics. The buyback is being implemented at a key moment for the platform, which is in the process of consolidating its transition from Ethereum to its own Layer 1 blockchain, the dYdX Chain. 86% of the tokens are on this new chain, while approximately 14% remain on Ethereum in the form of ethDYDX. Users have been urged to migrate their tokens before June 2025, as after that date the bridge between both chains may be discontinued.
The revenue distribution model has also been modified with the introduction of the buyback program. From now on, 40% of the protocol’s net revenue will be allocated to staking rewards, while 25% will be assigned to both the MegaVault and the buyback program. The remaining 10% will go to the Treasury SubDAO, which is responsible for the project’s financial sustainability.
dYdX Will Deepen its Buyback Program if Successful
The price of the DYDX token saw an increase of over 7% following the announcement of this program. However, it still remains significantly below its all-time high of nearly $4.53. At the time of writing this article, the token has risen by 7.5% and is trading at $0.7142 per unit. Additionally, the trading volume surged by 274%.
The protocol has also indicated that, if the buyback program proves successful, the proportion of revenue allocated to this initiative could increase, potentially reaching up to 100% in the future. The community has shown strong interest in strengthening the network’s security and reducing token circulation, which could have very positive effects on the token’s value.
