Decentralized trading exchange dYdX recently announced the introduction of a token buyback program aimed at enhancing network security and utility for its native token, DYDX. The protocol revealed that it would allocate 25% of its net monthly fees towards purchasing DYDX tokens from the open market, which will be staked to strengthen the network’s resilience.
This move by dYdX follows similar strategies adopted by other prominent DeFi projects like Aave and Jupiter, who have also implemented buyback programs to improve token utility and market performance.
The buyback program has led to a restructuring of dYdX’s revenue distribution model. Under the new framework, staking rewards will claim 40% of total earnings, while the MegaVault and buyback initiative will each receive 25%. The remaining 10% will be allocated to the Treasury SubDAO, responsible for financial sustainability and long-term growth.
Since the announcement, the price of the DYDX token has risen by over 8%, trading at around $0.73. However, the token still remains significantly below its all-time high of nearly $14.83, showing a decline of approximately 78%.
This buyback announcement comes at a crucial point in DYDX’s tokenomics evolution. The project successfully transitioned from Ethereum to its custom Layer 1 blockchain, the dYdX Chain, in 2023. While 86% of tokens now reside on the new network, approximately 14% remain on Ethereum as ethDYDX tokens. Users have been urged to migrate their ethDYDX tokens before June 2025 to prevent them from becoming inactive once the Ethereum bridge may be discontinued.
As of March 1, 2025, dYdX has unlocked around 85% of the total DYDX token supply. Token emissions will decrease by 50% from June 2025, with the final unlock scheduled for June 2026.
In conclusion, dYdX’s token buyback program aims to strengthen network security and enhance token utility, aligning with the project’s long-term growth strategy. The restructuring of the revenue distribution model and the emphasis on migrating tokens to the dYdX Chain signal a proactive approach towards maintaining the project’s sustainability and market performance.