dYdX's 75% Buyback Shift: Aligning Holder Incentives with Platform Success

The dYdX community has approved a significant shift in protocol revenue distribution, allocating 75% of net fees to token buybacks-a dramatic increase from the previous 25% allocation. The proposal, approved by 59.38% of voters on the governance forum, was announced on November 13, 2025, and marks a pivotal moment in decentralized finance treasury management. Under the revised plan, 75% of protocol revenue will be used to repurchase DYDX tokens on the open market, with 5% each directed to the Treasury SubDAO and the MegaVault for ecosystem development and staking incentives as research shows.

This decision reflects a strategic effort to align token holder incentives with platform performance. By tying buybacks directly to protocol fees, dYdX aims to reduce circulating supply and enhance token scarcity, and strengthen network security. The move also follows a broader tokenomics refinement initiated in March 2025, which included scheduled reductions in token emissions. The dYdX team emphasized that the increased buyback rate will create "constant buying pressure," reinforcing confidence in the token's long-term value.

The proposal, labeled 313, represents a departure from traditional corporate buyback models. Unlike centralized models where executives control repurchase decisions, dYdX's approach is fully automated and transparent, with every trade contributing to the buyback fund as per analysis. This mechanism ensures proportional benefits for all token holders and operationalizes the community's governance power. The allocation breakdown-75% for buybacks, 5% for Treasury SubDAO, and 5% for MegaVault-also addresses multiple ecosystem needs, balancing token supply reduction with funding for development and staking.

Analysts note that the decision could set a precedent for DeFi governance. By prioritizing token holder value through direct buybacks, dYdX is testing a model where protocol success translates into tangible token appreciation. However, challenges remain, including potential volatility in buyback execution and governance participation rates. The structured approach, with clear allocations to both buybacks and development, mitigates some risks while maintaining flexibility for market conditions.

The dYdX team announced the change on X, stating, "Starting today, 75% of protocol fees will be used to buy back DYDX on the open market." This follows a March 2025 buyback program and underscores the community's commitment to refining tokenomics. With token emissions declining in June 2025, the increased buyback allocation is part of a coordinated effort to tighten supply and reinforce the protocol's economic model as per reports.