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Summary of dYdX (Native)
Key Points
- dYdX Chain is a proof-of-stake blockchain network built using Cosmos SDK and CometBFT for consensus.
- DYDX token is the L1 protocol token for the dYdX Chain.
- Holders of DYDX token can participate in securing and governing the dYdX Chain network.
Allocation of DYDX
- 27.7%: Investors
- 15.3%: Employees and Consultants of dYdX Trading or Foundation
- 7.0%: Future Employees & Consultants of dYdX
About dYdX (Native Token)
Introducing dYdX Chain (DYDX): A Revolutionary Decentralized Exchange
The dYdX Chain is a decentralized, proof-of-stake blockchain network, meticulously crafted using the Cosmos SDK and harnessing the power of CometBFT for consensus. The DYDX token serves as the native L1 protocol token for the dYdX Chain, as ratified by the dYdX community through a democratic process of dYdX governance, comprising both Snapshot voting and an on-chain vote.
By leveraging their DYDX tokens, holders can either operate as Validators themselves or delegate their tokens to a trusted Validator, thereby contributing to the security and governance of the dYdX Chain network.
What is the Token Allocation for DYDX?
DYDX is allocated to users by validators on the dYdX Chain on a 1:1 proportional basis, directly correlated to the amount of Ethereum-based DYDX (ethDYDX) that each user transfers to the wethDYDX Smart Contract.
The allocation of DYDX is predicated on the allocation of ethDYDX, which has undergone changes since its inception on August 3, 2021, driven by multiple governance proposals. The revised allocation of ethDYDX is as follows:
- A substantial 27.7% allocation is designated for Investors
- Employees and Consultants of dYdX Trading or Foundation receive a 15.3% allocation
- A provision of 7.0% is made for Future Employees & Consultants of dYdX
- User Trading Rewards account for 14.5% of the allocation
- Retroactive Rewards comprise 5.0% of the total allocation
- Liquidity Provider Rewards constitute 3.3% of the allocation
- A significant 26.1% is reserved for the Community Treasury
- The Liquidity Staking Pool receives a 0.6% allocation
- The Safety Staking Pool is allocated a modest 0.5%
Source: dYdX Official Documentation
Seamless Transition to the dYdX Chain
The wethDYDX Smart Contract facilitates a seamless migration of ethDYDX from the Ethereum network to the dYdX Chain, ensuring a smooth transition.
Upon interaction, the wethDYDX Smart Contract executes the following functions in a fully decentralized, permissionless, and automated manner: it receives and irreversibly locks the ethDYDX tokens sent by the user, subsequently issuing a wrapped version of the Ethereum-based DYDX token (“wethDYDX”) to the user on a 1:1 proportional basis on the Ethereum network. Furthermore, dYdX Chain Validators can access and process the information stored in the wethDYDX Smart Contract, enabling the distribution of corresponding DYDX tokens to users by Validators on the dYdX Chain, contingent upon confirmation that the initial step is complete and the ethDYDX tokens are permanently locked within the wethDYDX Smart Contract.
For a more in-depth exploration of the migration of ethDYDX from the Ethereum network to the dYdX Chain, please refer to this resource.
dYdX Chain (DYDX): A Comprehensive Tokenomics Overview
Delve into the intricacies of DYDX tokenomics and explore project details below, complemented by an in-depth examination in our Token Mechanics blog.