Monthly token buybacks will account for 25% of the income generated by the DeFi trading platform dYdX.
On March 24, dYdX, a decentralized finance (DeFi) trading platform, launched its first-ever token repurchase program with the goal of reinvesting in its ecosystem to improve governance and security.
The statement states that monthly buybacks of the protocol’s native dYdX DYDX$0.715 token on the open market will account for 25% of its net fees.
According to CoinGecko, DYDX increased by more than 10% after the news and was trading at about $0.731 at the time of writing. Over the last two weeks, the token has increased by more than 21%.
Related: dYdX considers selling its derivatives trading division
In the past, ecosystem members received 100% of dYdX’s platform income. 10% will go to its treasury, 25% will support its USDC liquidity provision program, MegaVault, 25% will be utilized for token buybacks, and 40% will stay as staking rewards under the new allocation mechanism.
According to DYdX, the current 25% allotment to token buybacks could rise over time, perhaps reaching 100% as a result of further community debates.
Related: As derivatives soar, the DeFi market makes a resurgence
According to DefiLlama, the platform’s total value locked (TVL) is $279 million at the moment. Fees brought in $1.29 million in February and $1.09 million thus far in March.
25% of income is used for token buybacks, which has been declining. Source: DefiLlama
The DeFi summer of 2020 is often cited by the DeFi industry as a milestone because of its decentralized apps and yield farming-driven fast user growth.
Charles d’Haussy, CEO of the dYdX Foundation, said in a recent interview with Cointelegraph that the next big DeFi boom will happen soon after summer, maybe starting as early as September and lasting “months and months.”
In the middle of 2020, DYdX was mainly a DeFi platform for margin trading, lending, borrowing, and spot trading. After introducing its native DYDX coin and launching its layer-2 perpetual futures market, its popularity skyrocketed in 2021.
dYdX predicted in its 2024 ecosystem study that the amount of derivatives handled by decentralized exchanges (DEXs) will increase from $1.5 trillion in 2024 to $3.48 trillion by 2025.
Magazine: Despite income declines, Solana is “100x better” than memecoins, which are doomed.
