dYdX (DYDX)

System: dYdX — Trading and Exchange

dYdX is a decentralised trading system that primarily provides self-custodial perpetual futures execution for traders. The broader dYdX project was founded in 2017, and the current dYdX Chain instantiation was deployed in 2023. dYdX Chain is a Cosmos Software Development Kit and CometBFT proof-of-stake appchain with validators, full nodes, exchange modules, staking, governance, fee-distribution accounts, community treasury accounts, MegaVault and instant market-listing rules inside the current system boundary.

Market Data

Price$0.113288
Market Cap$96.31M
Fully Diluted Valuation$108.77M
30d Change-15.90%
365d Change-79.70%

Token Functionalities

Governance

  • Technical Parameter Control (Partial)

    Right to approve technical changes and software upgrades to the dYdX Chain. Strength is Partial because staked DYDX governance can approve the upgrade object, but validators and node operators must download, install, signal and run the relevant software for the upgrade path to take effect across the public chain.

  • Product/Service Line Decisions (Partial)

    Right to approve or direct creation and update of customer-facing markets and market surfaces within governance-controlled scope. Strength is Partial because governance can control new-market and market-parameter surfaces, while some product-surface paths depend on software upgrades, validator adoption, market-map operation, MegaVault operation or user actions using USDC rather than DYDX.

  • Economic Design/Parameter Control (Unilateral)

    Right to set or amend economic parameters that affect monetary flows, balances and incentive outcomes, including fees, rewards, distribution settings, liquidation settings, funding parameters and liquidity tiers. Strength is Unilateral for direct module-level parameter changes because successful parameter proposals execute on-chain without a discretionary off-chain executor for that object.

  • Process and Meta Parameter Control (Unilateral)

    Right to modify governance-process parameters, including deposit settings, voting-period rules, quorum, threshold and veto-related settings. Strength is Unilateral, where the object is a governance module parameter and a successful on-chain parameter-change proposal updates that object through the governance module.

  • Actor Set Permissioning (Partial)

    Right to re-weight privileged validator actors through staking, delegation and validator-set rules. Strength is Partial because bonded DYDX affects the active validator set and validator voting power, but validator operation remains participant-dependent and other privileged operator roles, such as MegaVault or market-map roles, are not automatically controlled by token weight alone.

  • Treasury Control (Unilateral)

    Right to direct on-chain community treasury or community-pool assets to specified recipient addresses through community-spend governance proposals. Strength is Unilateral for the on-chain transfer object. Any discretionary use of assets after receipt by a SubDAO, service provider, multisig or legal entity is handled separately under component-level Entity-Based Governance.

Collateral

  • Performance-Bond

    Right to post DYDX as a performance bond securing validator behaviour, with bonded validator and delegated stake exposed to slashing or jailing for protocol-rule violations. Current automatic double-sign and downtime slash fractions are 0.0, while governance-enabled slashing remains part of the live slashing framework.

Payments

  • Native Resource Fee (Weak)

    Right to consume dYdX Chain transaction resources by paying DYDX-denominated gas fees. Strength is Weak because DYDX is a live payment token for gas, but it is not the exclusive way to access all valuable system resources: trading fees are denominated in USDC, and USDC-denominated gas fees also exist.

Membership

  • Preferential Pricing (Hold-Based)

    Right to receive lower trading fees by meeting bonded staked-DYDX thresholds. The activation mechanism is staked DYDX: only bonded tokens count towards the trader’s staking fee discount, while unstaked DYDX and DYDX in the unbonding period do not qualify.

Service Provision

  • State Transition Execution and Transaction Sequencing

    Right to execute deterministic state transitions and decide transaction inclusion or ordering for dYdX Chain blocks by operating as a bonded validator, with delegators re-weighting validator capacity through staked DYDX.

Value Distribution

  • Buyback Entitlement (Discretionary but Regular)

    Right to benefit from protocol-revenue-funded DYDX buybacks and staking of acquired DYDX. Strength is Discretionary but Regular because the recurring buyback mechanism converts a governance-approved share of net protocol revenue into DYDX purchases and stakes acquired tokens, but allocation and continuation remain governance-directed rather than algorithmically guaranteed.

System Attributes

Operating Model

<p>dYdX&nbsp;is&nbsp;an&nbsp;On-Chain&nbsp;Protocol.&nbsp;dYdX&nbsp;Chain&nbsp;coordinates&nbsp;independent&nbsp;validators&nbsp;and&nbsp;full&nbsp;nodes&nbsp;to&nbsp;provide&nbsp;trading&nbsp;execution,&nbsp;settlement&nbsp;and&nbsp;chain&nbsp;security.&nbsp;The&nbsp;chain&nbsp;uses&nbsp;the&nbsp;Cosmos&nbsp;Software&nbsp;Development&nbsp;Kit&nbsp;and&nbsp;CometBFT&nbsp;consensus,&nbsp;while&nbsp;anyone&nbsp;can&nbsp;run&nbsp;a&nbsp;full&nbsp;node&nbsp;and&nbsp;full&nbsp;nodes&nbsp;with&nbsp;sufficient&nbsp;delegated&nbsp;governance&nbsp;tokens&nbsp;participate&nbsp;in&nbsp;block&nbsp;building&nbsp;as&nbsp;validators.&nbsp;Validators&nbsp;maintain&nbsp;local&nbsp;order&nbsp;books,&nbsp;propose&nbsp;blocks&nbsp;and&nbsp;commit&nbsp;state&nbsp;through&nbsp;consensus.&nbsp;Coordination,&nbsp;settlement,&nbsp;rewards&nbsp;and&nbsp;penalties&nbsp;are&nbsp;enforced&nbsp;by&nbsp;the&nbsp;chain,&nbsp;even&nbsp;though&nbsp;validators&nbsp;perform&nbsp;some&nbsp;order-book&nbsp;work&nbsp;off-chain&nbsp;inside&nbsp;node&nbsp;software.</p>

Value Creation

<p>dYdX&nbsp;has&nbsp;Hybrid&nbsp;Value&nbsp;Creation.&nbsp;dYdX&nbsp;creates&nbsp;its&nbsp;core&nbsp;trading&nbsp;service&nbsp;through&nbsp;both&nbsp;off-chain&nbsp;node&nbsp;processes&nbsp;and&nbsp;on-chain&nbsp;protocol&nbsp;state.&nbsp;The&nbsp;off-chain&nbsp;side&nbsp;is&nbsp;the&nbsp;validator&nbsp;and&nbsp;full-node&nbsp;order-book&nbsp;process:&nbsp;each&nbsp;full&nbsp;node&nbsp;maintains&nbsp;an&nbsp;in-memory&nbsp;order&nbsp;book,&nbsp;short-term&nbsp;orders&nbsp;live&nbsp;in&nbsp;node&nbsp;memory&nbsp;until&nbsp;matched,&nbsp;and&nbsp;proposers&nbsp;use&nbsp;local&nbsp;matches&nbsp;to&nbsp;build&nbsp;blocks.&nbsp;The&nbsp;on-chain&nbsp;side&nbsp;is&nbsp;CometBFT&nbsp;consensus,&nbsp;committed&nbsp;block&nbsp;state,&nbsp;margin&nbsp;and&nbsp;risk&nbsp;accounting,&nbsp;liquidation&nbsp;effects,&nbsp;staking,&nbsp;governance&nbsp;and&nbsp;fee-distribution&nbsp;modules.&nbsp;MegaVault&nbsp;also&nbsp;combines&nbsp;on-chain&nbsp;vault&nbsp;accounting&nbsp;with&nbsp;operator-set&nbsp;sub-vault&nbsp;parameters&nbsp;and&nbsp;USDC&nbsp;liquidity&nbsp;deployment.</p>

Value Capture

<p>dYdX&nbsp;has&nbsp;On-Chain&nbsp;Value&nbsp;Capture&nbsp;and&nbsp;Routing.&nbsp;Traders&nbsp;and&nbsp;transaction&nbsp;senders&nbsp;pay&nbsp;USDC&nbsp;maker&nbsp;and&nbsp;taker&nbsp;trading&nbsp;fees,&nbsp;DYDX-denominated&nbsp;gas&nbsp;fees&nbsp;and&nbsp;USDC-denominated&nbsp;gas&nbsp;fees&nbsp;into&nbsp;dYdX&nbsp;Chain&nbsp;fee-pool&nbsp;accounts.&nbsp;The&nbsp;Distribution&nbsp;ModuleAccount&nbsp;routes&nbsp;these&nbsp;fees&nbsp;to&nbsp;validators&nbsp;and&nbsp;DYDX&nbsp;holders&nbsp;that&nbsp;stake&nbsp;to&nbsp;validators;&nbsp;governance&nbsp;may&nbsp;also&nbsp;set&nbsp;community-pool&nbsp;parameters.&nbsp;A&nbsp;separate&nbsp;buyback&nbsp;route&nbsp;converts&nbsp;a&nbsp;governance-approved&nbsp;share&nbsp;of&nbsp;net&nbsp;protocol&nbsp;revenue&nbsp;into&nbsp;DYDX&nbsp;purchases&nbsp;and&nbsp;staking.&nbsp;For&nbsp;the&nbsp;buyback&nbsp;route,&nbsp;dYdX&nbsp;governance&nbsp;determines&nbsp;the&nbsp;revenue&nbsp;allocation,&nbsp;while&nbsp;the&nbsp;Treasury&nbsp;SubDAO&nbsp;executes&nbsp;purchases&nbsp;and&nbsp;staking&nbsp;through&nbsp;mandated&nbsp;accounts&nbsp;and&nbsp;selected&nbsp;venues.&nbsp;That&nbsp;delegated&nbsp;execution&nbsp;affects&nbsp;implementation,&nbsp;not&nbsp;the&nbsp;capture&nbsp;endpoint:&nbsp;the&nbsp;economic&nbsp;effect&nbsp;is&nbsp;routed&nbsp;back&nbsp;into&nbsp;the&nbsp;DYDX&nbsp;token&nbsp;through&nbsp;bought-and-staked&nbsp;tokens,&nbsp;alongside&nbsp;validator&nbsp;and&nbsp;staker&nbsp;fee&nbsp;receipts&nbsp;and&nbsp;community-governed&nbsp;treasury&nbsp;flows.</p>

Governance

Entity-Based: <p>Entity-based&nbsp;control&nbsp;applies&nbsp;only&nbsp;to&nbsp;specific&nbsp;delegated&nbsp;components,&nbsp;not&nbsp;to&nbsp;the&nbsp;whole&nbsp;system.&nbsp;The&nbsp;dYdX&nbsp;Treasury&nbsp;SubDAO&nbsp;handles&nbsp;concrete&nbsp;treasury&nbsp;execution&nbsp;components,&nbsp;including&nbsp;a&nbsp;Cayman&nbsp;Foundation,&nbsp;multisig,&nbsp;validator-staking&nbsp;activity,&nbsp;treasury&nbsp;diversification&nbsp;and&nbsp;financial&nbsp;planning&nbsp;for&nbsp;the&nbsp;DAO.&nbsp;The&nbsp;Treasury&nbsp;SubDAO&nbsp;also&nbsp;controls&nbsp;buyback&nbsp;execution&nbsp;under&nbsp;a&nbsp;governance-approved&nbsp;mandate.&nbsp;MegaVault&nbsp;and&nbsp;market-map&nbsp;components&nbsp;include&nbsp;appointed&nbsp;or&nbsp;elected&nbsp;operator&nbsp;roles&nbsp;that&nbsp;can&nbsp;configure&nbsp;sub-vault&nbsp;settings&nbsp;or&nbsp;launchable-market&nbsp;data.&nbsp;These&nbsp;are&nbsp;delegated&nbsp;execution&nbsp;roles,&nbsp;while&nbsp;the&nbsp;core&nbsp;chain,&nbsp;fee&nbsp;modules&nbsp;and&nbsp;community&nbsp;treasury&nbsp;remain&nbsp;governed&nbsp;through&nbsp;protocol&nbsp;and&nbsp;participant&nbsp;processes.</p> Participant-Based: <p>Participant-based&nbsp;governance&nbsp;applies&nbsp;to&nbsp;validators,&nbsp;delegators,&nbsp;full-node&nbsp;operators&nbsp;and&nbsp;access-stack&nbsp;operators,&nbsp;where&nbsp;role&nbsp;participation,&nbsp;not&nbsp;token&nbsp;holding&nbsp;alone,&nbsp;determines&nbsp;execution.&nbsp;Validators&nbsp;and&nbsp;full&nbsp;nodes&nbsp;run&nbsp;the&nbsp;software&nbsp;that&nbsp;maintains&nbsp;local&nbsp;order&nbsp;books,&nbsp;proposes&nbsp;blocks&nbsp;and&nbsp;participates&nbsp;in&nbsp;consensus.&nbsp;DYDX&nbsp;staking&nbsp;can&nbsp;re-weight&nbsp;validator&nbsp;participation,&nbsp;but&nbsp;validators&nbsp;must&nbsp;still&nbsp;operate&nbsp;node&nbsp;software&nbsp;and&nbsp;can&nbsp;choose&nbsp;whether&nbsp;to&nbsp;adopt&nbsp;software&nbsp;upgrades.&nbsp;This&nbsp;role-gated&nbsp;operational&nbsp;layer&nbsp;is&nbsp;material&nbsp;to&nbsp;block&nbsp;production,&nbsp;upgrade&nbsp;adoption,&nbsp;validator-set&nbsp;operation&nbsp;and&nbsp;non-exclusive&nbsp;access&nbsp;components&nbsp;such&nbsp;as&nbsp;indexers.</p> Token-Based: <p>Token-based&nbsp;governance&nbsp;applies&nbsp;to&nbsp;staked&nbsp;DYDX&nbsp;control&nbsp;over&nbsp;on-chain&nbsp;governance&nbsp;surfaces.&nbsp;DYDX&nbsp;holders&nbsp;can&nbsp;propose&nbsp;and&nbsp;vote&nbsp;through&nbsp;the&nbsp;Cosmos&nbsp;x/gov&nbsp;module,&nbsp;with&nbsp;vote&nbsp;weight&nbsp;equal&nbsp;to&nbsp;actively&nbsp;staked&nbsp;DYDX;&nbsp;unstaked&nbsp;and&nbsp;unbonding&nbsp;DYDX&nbsp;do&nbsp;not&nbsp;count.&nbsp;Proposal&nbsp;subject&nbsp;matter&nbsp;includes&nbsp;governable&nbsp;parameters,&nbsp;community&nbsp;fund&nbsp;spending&nbsp;and&nbsp;software&nbsp;upgrades.&nbsp;This&nbsp;gives&nbsp;staked&nbsp;DYDX&nbsp;binding&nbsp;control&nbsp;over&nbsp;direct&nbsp;parameter&nbsp;changes&nbsp;and&nbsp;on-chain&nbsp;treasury&nbsp;transfers,&nbsp;while&nbsp;software&nbsp;upgrades&nbsp;and&nbsp;some&nbsp;market&nbsp;or&nbsp;product-surface&nbsp;changes&nbsp;also&nbsp;require&nbsp;validator,&nbsp;node-operator&nbsp;or&nbsp;appointed-operator&nbsp;execution.</p>