DYDX is distributed to users by validators on the dYdX Chain on a 1-1 proportional basis based on the amount of Ethereum-based DYDX (ethDYDX) that each user sends to the [wethDYDX Smart Contract](https://etherscan.io/address/0x46b2deae6eff3011008ea27ea36b7c27255ddfa9). The allocation of DYDX is based on the allocation of ethDYDX. The allocation of ethDYDX changed since its launch on August 3, 2021 due to several governance proposals. The updated allocation of ethDYDX: * 27.7% is allocated to Investors * 15.3% is allocated to Employees and Consultants of dYdX Trading or Foundation * 7.0% is allocated to Future Employees & Consultants of dYdX * 14.5% is allocated to User Trading Rewards * 5.0% is allocated to Retroactive Rewards * 3.3% is allocated to Liquidity Provider Rewards * 26.1% is allocated to Community Treasury * 0.6% is allocated to Liquidity Staking Pool * 0.5% is allocated to Safety Staking Pool Source: [dYdX Documentation](https://docs.dydx.community/dydx-governance/start-here/dydx-allocations)

The dYdX Chain is a proof-of-stake blockchain network built using the Cosmos SDK and leveraging CometBFT for consensus. The DYDX token is the L1 protocol token for the dYdX Chain, as agreed by the dYdX community through dYdX governance ([Snapshot vote](https://snapshot.org/#/dydxgov.eth/proposal/0x17026e18317dc29fe745d3130246a83b1485612da9c97e7261e8f659cf33663c) and an [on-chain vote](https://dydx.community/dashboard/proposal/15)) Holders of the DYDX token can use their tokens to run a Validator or stake their tokens to a Validator in order to participate in securing and governing the dYdX Chain network.