About dYdX (ethDYDX)
What Is DYDX (dYdX)?
Ethereum-based DYDX ($ethDYDX) is a governance token that allows the dYdX community to truly govern the dYdX Layer 2 Protocol built on Ethereum ("dYdX v3"). ethDYDX is currently undergoing a migration from Ethereum to the dYdX Chain. More information is available here. If you want to migrate ethDYDX to dYdX Chain DYDX, to enable staking, security and governance of the dYdX Chain you can follow the how-to-bridge guide here.
If you want to read about the new token utility for dYdX Chain DYDX you can read the blog here
ethDYDX (dYdX) is the governance token for the layer 2 protocol built on Ethereum. By enabling shared control of dYdX v3, ethDYDX allows traders, liquidity providers, and partners of dYdX to work collectively towards an enhanced dYdX v3.
Built on StarkWare’s StarkEx scalability engine, layer 2 is used for trading of cross-margined perpetuals on the platform. The scaling solution allows dYdX to increase transaction speed, eliminate gas costs, reduce trading fees and lower minimum trade sizes on the protocol.
A total of 1,000,000,000 ethDYDX have been minted, and started to become accessible over five (5) years, on August 3rd, 2021, at 15:00:00 UTC.
Who Are the Founders of dYdX?
Antonio Juliano — an experienced programmer with a background in blockchain technology is the founder and CEO of dYdX Trading Inc. He first entered the crypto space in 2015 upon getting a job as a software engineer at Coinbase — a cryptocurrency exchange platform. As a Princeton University graduate with a degree in computer science, Antonio Juliano embarked on his entrepreneurial journey and founded dYdX in early 2017 .
What Makes dYdX Unique?
dYdX Layer 2 increases scalability of the network through use of a form of zero-knowledge rollup — zkSTARKS. The technology receives proofs, while validating a batch of transactions off-chain. These proofs are then sent back to the blockchain, where they are verified by a smart contract. zkSTARKS makes it possible to remove expensive computations from the mainnet with no sacrifices in decentralization.
What is the allocation of ethDYDX?
A total of 1,000,000,000 ethDYDX have been minted, and started to become accessible over five (5) years, on August 3rd, 2021, at 15:00:00 UTC.
The five-year allocation of the total supply of ethDYDX was initially as follows:
- 27.7% is allocated to Investors
- 14.5% is allocated to User Trading Rewards
- 15.3% is allocated to Employees and Consultants of dYdX Trading or Foundation
- 5.0% is allocated to Retroactive Rewards
- 5.2% is allocated to Liquidity Provider Rewards
- 7.0% is allocated to Future Employees & Consultants of dYdX
- 24.2% is allocated to Community Treasury
- 0.6% is allocated to Liquidity Staking Pool
- 0.5% is allocated to Safety Staking Pool
Since the launch of ethDYDX, several governance proposals have resulted in changes to the initial allocation. The updated allocation as of the start of Epoch 31 (December 19, 2023) is reflected in the pie chart below.
The updated allocation of ethDYDX tokens as of the start of Epoch 31 (December 31, 2023) is as follows:
How Is the dYdX Network Secured?
DYDX is an ERC-20 token deployed on the Ethereum mainnet. dYdX’s layer 2 scaling solution is built on StarkWare’s ZK-STARKS technology and relies on Ethereum blockchain to verify transaction proofs.
When Will DYDX Trading Begin?
DYDX token first became available for purchase in September 2021.
Where Can You Buy DYDX?
DYDX is currently available for purchase on the following exchanges: Binance, Huobi Global, KuCoin, Gate.io, Kraken, Poloniex, Uniswap (V3), OKEx, LBank, Sushiswap, Crypto.com Exchange, 0x Protocol, XT.COM, BitZ, WhiteBIT, 1inch Exchange, WOO Network, CoinDCX, Deepcoin, Cryptology, BKEX, DigiFinex, Pionex, BW.com, BitMart, AEX, ZBG, MEXC, BiONE, Bibox, Hoo, Hotbit, Decoin, Bitrue, HitBTC, Tokocrypto, Mandala Exchange, CoinW, BigONE, ZT, AOFEX, WBF Exchange, CoinBene and Bitget.
Cryptocurrency newbie? You can read more about how to enter the market and how to buy BTC, DYDX or any other token in CoinMarketCap education portal — Alexandria.
Migration to the dYdX Chain
On June 22, 2022, dYdX Trading Inc.(“dYdX Trading”) announced the next iteration of the dYdX protocol - the dYdX Chain Open Source Software. The dYdX Chain is a proof-of-stake blockchain network and, as such, it requires a Layer 1 (“L1”) protocol token for staking to validators in order to secure the chain and for stakers of the L1 token to govern the network. Holders of the L1 token can use their L1 tokens to run a validator or stake their tokens to a validator in order to participate in securing and governing the network.The wethDYDX Smart Contract enables the migration of ethDYDX from Ethereum to the dYdX Chain.When interacted with, the wethDYDX Smart Contract would carry out the following functions in a fully permissionless and automated manner:Receive and permanently lock the ethDYDX tokens sent by the user to the wethDYDX Smart Contract;Send a wrapped version of the Ethereum-based DYDX token (“wethDYDX”) to the user on a 1-1 proportional basis on Ethereum; anddYdX Chain validators can also read and ingest the information in the wethDYDX Smart Contract such that corresponding DYDX can be distributed to users by validators on the dYdX Chain once there is confirmation that Step 1 above is complete and the ethDYDX is permanently locked in the wethDYDX Smart Contract.More information about the migration of ethDYDX from Ethereum to dYdX Chain is available here.
- 14.5% (144,693,506 $ethDYDX) based on the Trading Rewards Formula
- In DIP 16 and DIP 20, the dYdX community voted to reduce trading rewardsby a total of 2.3M $ethDYDX. (958,904 $ethDYDX from DIP 16 and 1,294,520 $ethDYDX from DIP 20). The 2.3M $ethDYDX will accrue in the Rewards Treasury and can be used by the dYdX community with a governance vote.
- In DIP 29, the dYdX community voted to reduce trading rewards by ⅓ from Epoch 30-32 on dYdX v3 to the following values:
- Epoch 30: 1,054,795 $ethDYDX
- Epoch 31: 527,398 $ethDYDX
- Epoch 32: 0 $ethDYDX
- 5.0% (50,309,197 $ethDYDX) is allocated to Retroactive Mining Rewards
- After Epoch 0, 24,690,803 unclaimed $ethDYDX from the Retroactive Mining rewards program were transferred to the Community Treasury.
- 3.2% (31,643,838 $ethDYDX) based on the Liquidity Provider Rewards Formula(s)
- In DIP 24, the dYdX community voted to reduce Liquidity Provider Rewards by 50% from 1,150,685 $ethDYDX per epoch to 575,343 $ethDYDX per epoch. The excess 575,342 $ethDYDX per epoch will accrue in the Rewards Treasury and can be used by the dYdX community with a governance vote.
- In DIP 29, the dYdX community voted to reduce Liquidity Provider rewards by ⅓ from Epoch 30-32 on dYdX v3 to the following values:
- Epoch 30: 383,562 $ethDYDX
- Epoch 31: 191,781 $ethDYDX
- Epoch 32: 0 $ethDYDX
- 0.6% (5,779,608 $ethDYDX) to users staking $USDC to a Liquidity Staking Pool
- In DIP 14, the dYdX community voted to set the rewards associated with staking $USDC to 0. The 383,562 $ethDYDX previously distributed to $USDC stakers will accrue in the Rewards Treasury and can be used by the dYdX community with a governance vote.
-0.5% (5,289,934 $ethDYDX) to users staking $ethDYDX to a Safety Staking Pool
- In DIP 17, the dYdX community voted to set the rewards associated with staking $ethDYDX to 0. The 383,562 $ethDYDX previously distirbuted to $ethDYDX stakers will accrue in the Rewards Treasury and can be used by the dYdX community with a governance vote.
Note:
The token allocations for Investors, Employees and Consultants of dYdX Trading or Foundation are subject to transfer restrictions,ethDYDX accruing in the Community and Rewards Treasury can be used by the dYdX community with a governance vote.
Out of the allocations stipulated above apprximately ~34% of total ethDYDX supply is currently in circulation.
