dYdX Launches Its Inaugural Buyback Program, Allocating 25% of Its Net Protocol Fees to Repurchase DYDX Tokens

This strategic move allocates 25% of the platform's net protocol fees to repurchase DYDX tokens from the open market monthly.

Decentralized trading platform dYdX has launched its inaugural buyback initiative, diverting 25% of the platform’s net protocol fees to repurchase DYDX tokens from the open market on a monthly basis.

This program, voted on and passed by the dYdX community, will see the Treasury SubDAO use a Time-Weighted Average Price (TWAP) strategy to buyback DYDX tokens in a manner that is designed to minimize market impact.

Once purchased, the tokens will be locked in the dYdX protocol and used to stake to validators, reducing the circulating supply of DYDX and bolstering the network's security.

The move comes as traders are keenly watching the development and speculating on its potential impact on DYDX’s price in April.

How the dYdX Crypto Buyback Works and Affects the Market

The dYdX community, not the Foundation, decided to channel a quarter of the platform’s protocol fees into buying DYDX tokens, according to The Block.

These purchases will be handled by the Treasury SubDAO with a TWAP strategy, aiming to keep market impact minimal.

After purchase, the program will stake the tokens to validators, further cutting the circulating supply and boosting network security.

“This initiative directly links the community's interest to the platform's growth and reinforces the role of the DYDX token in this ecosystem,” said Charles d'Haussy, CEO of the dYdX Foundation.

The launch was met with some interesting reactions. DYDX shot up 7-10% to reach $0.76, though it later settled at $0.71, while trading volume soared 270% to $41.1 million.

With BTC price above $87,000, altcoins like DYDX often take cues from the broader crypto market.

If April brings a rally, the buyback could fuel an even bigger move in DYDX.

However, the impact depends on revenue. dYdX reportedly saw $270 billion in 2024 trading volume, but this year’s numbers might be lower, and volumes vary monthly.

Some X posts claim buybacks could hit $17.5 million yearly with peak volume, but a quiet month lessens the push.

Staking shrinks supply long-term, but a short-term pump needs strong buying and trader hype.

This ties the community to the platform's growth and reinforces the role of the $DYDX token in this ecosystem.

The higher the volume on dYdX, the more fees will be generated, which allows for more tokens to be bought back and staked to dYdX validators.

The initiative is a significant step in decentralized trading platforms engaging directly with their community and economic tokens to foster long-term growth and stability within the cryptocurrency industry.

The dYdX community voted to channel 25% of the platform's protocol fees into buying $DYDX tokens on the open market.

The Treasury SubDAO will be handling these purchases with a Time-Weighted Average Price (TWAP) strategy to minimize market impact and buyback tokens in a manner that is designed to be efficient and competitive.

Once purchased, the tokens will be locked in the dYdX protocol and used to stake to validators, reducing the circulating supply of $DYDX and bolstering the network's security.

The initiative is a significant one, especially given that it was voted on and passed by the dYdX community. It also serves to highlight the role that community involvement is playing in the development of next-generation decentralized trading platforms.

The dYdX community is also considering increasing the buyback rate to 100% of protocol fees, a move that could further boost the value of the DYDX token.

According to CryptoNews, a proposal to this effect was put forth and is currently being discussed.

The initiative to channel 25% of protocol fees into buying back and locking up DYDX tokens was approved in March 2024 and is now being launched.

The proposal to increase the buyback rate to 100% of protocol fees was put forth in February 2024 and is currently being discussed by the dYdX community.

The initiative to channel 25% of protocol fees into buying back and locking up DYDX tokens was approved by the dYdX community in March 2024.

The proposal to increase the buyback rate to 100% of protocol fees was put forth by community members and is currently being discussed.

The dYdX community is also considering increasing the buyback rate to 100% of protocol tokesn, a move that could further boost the value of the DYDX token. According to CryptoNews, a proposal to this effect was put forth and is currently being discussed.

The initiative to channel