dYdX Token Surges 7% Following New Buyback Initiative
dYdX is directing 25% of its protocol fees toward a buyback program, with discussions about potentially increasing this to 100%.
What You Should Know:
- dYdX will utilize 25% of its protocol fees for buybacks.
- Ongoing community discussions may lead to increasing the buyback allocation to 100% of net revenue.
The dYdX token experienced a nearly 7% rise to $0.72 after the decentralized derivatives exchange dYdX announced a buyback program, pledging 25% of its monthly protocol fees for purchasing tokens on the open market.
This initiative is part of a strategic attempt to bolster the token’s significance within the network’s economic framework, especially after a challenging year in which DYDX has dropped over 78% in value.
The adjustments in buyback allocations reflect a notable change in how dYdX intends to distribute its protocol revenue, with 40% designated for stakers, 25% for the new buying initiative, 25% toward the MegaVault for market support, and the remainder for treasury tasks.
In the previous year, the exchange recorded $46 million in net protocol revenue from a trading volume exceeding $270 billion. Governance is currently debating the possibility of raising the buyback percentage to even 100% of the protocol fees.
Tokens acquired through this buyback will potentially be allocated for staking over an extended duration to enhance network security, according to a spokesperson from dYdX.
Moreover, there will be a shift in token supply dynamics, with emissions expected to halve starting in June. Most DYDX tokens are set to be unlocked, with the rest slated for vesting by mid-2026.
Finally, a proposal is on the table to eliminate non-bridged Ethereum-based DYDX tokens from circulation if they remain untransferred to the dYdX layer 1 by June.
