The dYdX community has officially approved Stage 1 of the Treasury SubDAO Buyback Program, marking a major step in aligning token incentives with the protocol’s long-term growth. The initiative will allocate 25% of net protocol revenue toward buying DYDX from the open market and staking it with validators, ultimately reinforcing network security.
With an estimated $9 million in DYDX expected to be bought back in 2025, this move follows a growing trend among DeFi protocols using buybacks to enhance liquidity, stabilize token supply, and strengthen security.
How the Buyback Program Works
The buyback initiative will be implemented in phases, with a gradual reduction in MegaVault’s revenue share from 50% to 25% to fund the program. The acquired DYDX tokens will be staked through the Treasury SubDAO, contributing to network security while generating additional staking rewards that can be reinvested into the ecosystem.
Key Elements of the Buyback Program:
25% of net protocol revenue will be used to purchase DYDX on centralized and decentralized exchanges.
The purchased DYDX will be staked to validators, reinforcing network security.
MegaVault’s revenue share will be reduced from 50% to 25%, redistributing funds toward buybacks.
$9 million in DYDX is projected to be bought back in 2025, based on current revenue estimates.
Why Buybacks Matter for dYdX
Buybacks have become a common mechanism in DeFi to strengthen token economies. Platforms like Binance, Jupiter, and Hyperliquid have implemented similar programs to improve tokenholder alignment, reduce circulating supply, and boost staking participation. For dYdX, this initiative offers several potential benefits:
Strengthening network security by increasing the amount of DYDX staked with validators.
Enhancing tokenholder alignment by tying protocol revenue more directly to DYDX’s value.
Supporting long-term price stability through sustained open-market purchases.
Future Considerations
The dYdX community may later adjust the buyback allocation, with discussions already considering scaling up to 100% of net protocol revenue in the future. Additionally, new models could emerge where purchased DYDX is distributed to stakers, MegaVault depositors, or other ecosystem participants to further drive engagement.
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