dYdX (DYDX) Rolls Out Buyback Program to Pump Value Back into the Ecosystem

With 85% of DYDX tokens already unlocked, dYdX is rolling out a buyback program to pump value back into the ecosystem.

Decentralized exchange dYdX is rolling out a buyback program and dedicating a portion of net protocol fees toward monthly buybacks of DYDX tokens, beginning Monday.

The move is designed to pump value back into the ecosystem and will see 25% of net protocol fees go toward the initiative. The funds will be used to buy DYDX from the open market and stake them 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:

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 24% of net protocol fees to buybacks, ongoing community discussions are exploring the possibility of increasing the percentage up to 100% over time.

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 exchange launched on Ethereum in May 2021, and later moved to its own dedicated layer-1 chain in 2023.

The exchange went through a period of upheaval earlier in 2024, as several team members, including core team members, left the company. In March, 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.”

Juliano had initially stepped down as CEO earlier in May, shifting into a chairman and president role at dYdX Trading. In his place, former operating partner Ivo Crnkovic-Rubsamen took over as CEO.

In 2024 alone, dYdX has chalked 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 new buyback plan comes as dYdX is also adjusting its token emission schedule. As of March, around 85% of DYDX tokens have reportedly been unlocked.

It’s expected that emissions will 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.”

The buyback plan 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, while 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 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 drastically alter the protocol’s long-term economics.

“As the program takes effect, discussions are already underway about the possibility of expanding it further.”