With 85% of DYDX tokens already unlocked, dYdX is rolling out a buyback program to pump value back into the ecosystem.
The team behind the decentralized exchange dYdX just kicked off its first-ever DYDX (DYDX) buyback, aiming to boost confidence in the token. Starting Monday, 25% of net protocol fees will go toward monthly buybacks — buying DYDX from the open market and staking it to help secure the network, according to a March 24 blog announcement from the company.
Until now, all of dYdX’s protocol revenue went straight to ecosystem participants. But with the new buyback program, things are being split up a bit differently:
- 10% – Treasury SubDAO for financial sustainability initiatives.
- 25% – MegaVault.
- 25% – Buyback Program.
- 40% – Staking Rewards.
According to the dYdX team, the setup ensures that protocol revenue is “strategically reinvested into the ecosystem, strengthening network security, governance, and long-term sustainability.” While the initial allocation dedicates 25% of net protocol fees to buybacks, ongoing community discussions are exploring the possibility of increasing the percentage up to 100% over time.
Buyback amid reorganization
Founded in 2017 by Antonio Juliano, dYdX is a decentralized exchange that lets users trade crypto, margin trade, and lend — all without needing a middleman.
The buyback plan comes at a time of big shifts for dYdX. Back in October, the exchange saw several team members, including core team members, leave. CEO Antonio Juliano announced layoffs affecting 35% of the core team as part of a major restructuring. In a blog post, Juliano explained that the company needed to evolve as “the company we’ve built is different from the company dYdX must be.”
“The decision to let go was a realization that the company we’ve built is different from the company dYdX must be. We will move forward with clarity and renewed passion. We will create amazing things.”
dYdX
Juliano had initially stepped down as CEO earlier in May 2024, shifting into a chairman and president role at dYdX Trading. In his place, former operating partner Ivo Crnkovic-Rubsamen took over as CEO.
Entering new lands
In 2024 alone, dYdX racked up $270 billion in trading volume and pulled in $46 million in net protocol fees across 150 markets. Since launching in 2021, its total trading volume has surpassed $1.46 trillion, according to company data.
The buyback program appears to be aimed at reinforcing DYDX tokenomics at what could be a crucial point in its emission schedule. As of March, around 85% of DYDX tokens have reportedly been unlocked. Emissions are expected to decrease by approximately 50% in June, with all token unlocks potentially wrapping up by June 2026.
On top of that, the dYdX Community Treasury holds approximately 190 million DYDX tokens, representing nearly 20% of the total supply, reserved for future community-driven initiatives.
“This ensures that resources remain available to further develop and scale the protocol.”
dYdX
The buyback also comes after dYdX moved from Ethereum to its own dedicated layer-1 chain in 2023. As of press time, approximately 86% of DYDX tokens are on dYdX Chain, though the remaining 14% still exist on Ethereum as ethDYDX. Following the migration, the dYdX community is now considering cutting support for the cross-chain bridge by June, which would remove any unbridged ethDYDX tokens from circulation on dYdX Chain.
The crypto exchange team notes that if the allocation to buybacks were to increase to 100% of net protocol fees, it could “significantly accelerate the reduction of tokens in circulation while further strengthening network security and validator incentives.” It remains to be seen if the dYdX community will back such a bold move, which could significantly impact the protocol’s long-term economics.
“As the program takes effect, discussions are already underway about the possibility of expanding it further.”
dYdX
Following the buyback program announcement, the market has responded positively as the DYDX token soared 7% to $0.7224, while trading volume on crypto exchanges jumped 225%. However, despite the surge, the token is still down 84% from its all-time high of $4.52, which it reached in March 2024.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
