Here’s how much DYDX has evolved since its launch

DYDX, the native token of the dYdX chain, has gone from a government-only coin to a dynamic and multi-faceted asset within six months of its launch.

According to a dYdX Foundation blog post, DYDX has become the powerhouse of the Layer 1 blockchain, enabling decentralized governance and allowing users to stake their tokens for rewards.

A DYDX release timeline

DYDX was launched in October 2023 along with the dYdX chain. Prior to this, the dYdX Foundation had launched DYDX (now ethDYDX) in August 2021. ethDYDX serves as a governance token for the dYdX v3 Ethereum-based Layer 2 protocol.

In September 2023, the dYdX community voted to adopt DYDX as the native token of the dYdX chain. In this regard, a wethDYDX smart contract was deployed to act as a bridge for token holders to convert their ethDYDX to DYDX.

At the time of writing, over 75% of all ethDYDX have been converted to DYDX and migrated to the dYdX chain. With 25% remaining, the circulating supply of ethDYDX now stands at approximately 247 million.

Establishment of DYDX

dYdX Chain was designed with a staking reward mechanism that distributes 100% of protocol fees, paid primarily in Circle (USDC), to stakers.

“This mechanism not only incentivizes security provision, but also opens up several practical use cases for Stakers. Specifically, they can reinvest their USDC stake rewards in crypto or other assets or use USDC as collateral to trade on the dYdX chain with just a few clicks,” said the dYdX Foundation.

More than 18,900 DYDX participants are receiving rewards, with $20 million disbursed to date. About 149 million DYDX, representing 14.9% of the total supply, are staked to active pool validators on the dYdX chain with an annual percentage return of 18%.

The journey so far

Earlier this month, the dYdX community approved a proposed liquid staking of 20 million DYDX to reduce the possibility of malicious attacks, improve network security, and decentralize validator operations. Liquid staking rewards would be automatically compounded USDC, automatically converted to DYDX and then re-staked to generate additional return.

The dYdX chain now has over $120 billion in accumulated trading volume with an increase in staked assets. Community members have also initiated 55 governance proposals, indicating active participation in the network’s decision-making process.

Meanwhile, DYDX has a total supply of 1 billion tokens, a circulating supply of 501 million DYDX, and a five-year token distribution schedule.

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