dYdX Launches $DYDX Buyback Program, 25% of Fees to Reduce Token Supply

The dydx community has launched a $DYDX Buyback Program, marking a significant phase in the tokenomics of the $DYDX token. This initiative involves allocating 25% of the net protocol fees to systematically buy back $DYDX tokens from the open market and stake them, thereby reinforcing long-term confidence in the token and strengthening network security. The program is designed to align platform growth with tokenomics, ensuring continuous reinvestment into the ecosystem.

The Buyback Program introduces a structured mechanism for utilizing protocol revenue to directly benefit the dYdX ecosystem. Net protocol revenue is now distributed as follows: 10% to the Treasury SubDAO for financial sustainability initiatives, 25% to MegaVault, 25% to the Buyback Program, and 40% to Staking Rewards. Ongoing governance discussions suggest that the allocation for buybacks could increase up to 100% over time, potentially leading to further reductions in the circulating supply of $DYDX tokens.

This launch is part of a broader phase in $DYDX tokenomics. As of March 1, 2025, 85% of $DYDX tokens have been unlocked, with emissions set to drop by 50% in June 2025. By June 2026, all token unlocks will be complete. The migration from Ethereum to dYdX’s Layer 1 in 2023 has also reshaped the token landscape, with 86% of $DYDX tokens now on the dYdX Chain and 14% remaining on Ethereum as ethDYDX. The dYdX Community has proposed discontinuing support for the cross-chain bridge in June 2025, which could lead to the removal of unbridged ethDYDX tokens from circulation, further tightening the supply.

The dYdX Community Treasury holds approximately 190 million $DYDX tokens, reserved for future community-driven initiatives, ensuring long-term sustainability and ecosystem growth. With the launch of dYdX Unlimited in November 2024 and a reimagined mobile trading experience in February 2025, the protocol is evolving. The Buyback Program ensures that as dYdX scales, the alignment between platform growth and the $DYDX token is maintained, securing its role in the ecosystem.

Like all major changes in the dYdX ecosystem, the Buyback Program was introduced through community governance, reinforcing dYdX’s commitment to decentralization. As the initiative rolls out, discussions about expanding its impact are already underway. If the buyback allocation were to increase to 100% of net protocol fees, it could significantly accelerate token reduction, enhance network security, and strengthen validator incentives. This ongoing governance debate highlights the community’s active role in shaping the protocol’s long-term economic model.

The dYdX Buyback Program is a major step toward strengthening $DYDX tokenomics and ensuring long-term alignment between platform success and token value. With upcoming advancements in Spot Trading, EVM Support, and expanded trading features, dYdX is setting the stage for the next phase of decentralized finance. The program aligns with dYdX’s expansion into Spot Trading, Multi-Asset Margining, and EVM Support, ensuring that $DYDX remains central to the platform’s future development.