dYdX Introduces Token Buyback Program to Strengthen Network Security and Enhance Utility

According to a March 24 announcement, the protocol stated that it would allocate 25% of its net monthly fees to buy DYDX tokens from the open market.

Decentralized trading exchange dYdX has introduced a token buyback program to strengthen network security and enhance the utility of its native token, DYDX.

According to a March 24 announcement, the protocol stated that it would allocate 25% of its net monthly fees to buy DYDX tokens from the open market. These tokens will be staked to boost the network’s resilience directly.

dYdX hinted that the buyback allocation could expand in the future, potentially reaching 100% of protocol revenue if the program proves successful.

“If the program performs well, we may increase the buyback to claim all of the protocol's revenue for staking and network security,” the exchange stated.

The initiative aligns with broader trends in the DeFi sector, where platforms are seeking to enhance their token utility and stability. Prominent DeFi protocols like Aave and Jupiter are also experimenting with buybacks to improve their token utility and market performance.

Revenue distribution model

Meanwhile, the buyback program has also prompted a reshuffle in dYdX’s revenue distribution model.

Under the new framework, staking rewards will claim 40% of total earnings, while the recently introduced MegaVault and the buyback initiative will each receive 25%. The remaining 10% will go to the Treasury SubDAO, an entity responsible for financial sustainability and long-term growth.

Following the announcement, the DYDX token price climbed by over 8%, trading around $0.73, according to CryptoSlate data.

However, despite this recent gain, DYDX remains significantly below its all-time high of nearly $14.83, representing a decline of roughly 78%.

DYDX tokenomics

This buyback announcement comes at a critical point in the evolution of DYDX’s tokenomics.

The protocol explained that its community had successfully transitioned from Ethereum to its custom Layer 1 blockchain, the dYdX Chain, in 2023.

Following the event, approximately 86% of its tokens reside on the new network. However, roughly 14% remain on Ethereum as ethDYDX tokens.

Due to this situation, the project has repeatedly urged users to migrate their ethDYDX tokens before June 2025, when the Ethereum bridge may be discontinued. Failure to do so could render unbridged tokens inactive.

As of March 1, 2025, the decentralized protocol stated that it has already unlocked around 85% of the total DYDX token supply. From June 2025, token emissions will drop by 50%, with the final unlock scheduled for June 2026.