- The dYdX community concluded a vote today to approve a proposal that will reduce trading rewards by 45%.
- The result sent the decentralized crypto exchange’s native token soaring by over 21%.
- The proposal saw overwhelming support from community members with over 91% of the votes in favor.
- Wintermute Trading’s DeFi envoy Callen Van Den Elst proposed the reduced trading rewards last month.
The community behind dYdX has voted in favor of a key governance proposal that sought to reduce the platform’s trading rewards by almost half. The proposal’s approval had a positive impact on the decentralized exchange’s (DEX) namesake native token, which saw double-digit returns.
dYdX will reduce trading rewards by 45%
According to dYdX’s governance forum, the proposal to slash trading rewards by 45% was introduced by crypto market maker Wintermute’s DeFi envoy Callen Van Den Elst last month. The proposal came in light of the downturn in the crypto market which according to the envoy, made the trading rewards excessive since they were the highest contributor to yearly token inflation.
By reducing trading rewards, excess DYDX are retained in the rewards/community treasury. This can be accessed by the community through a governance vote, but most importantly, the retained DYDX will have a significant impact on the DAOs ability to fund initiatives in V4 in a sustainable and controlled manner!”
The proposal witnessed overwhelming support from the community with the votes in favor of reducing the DEX’s trading rewards outweighing the votes against by over 20 million dYdX. dYdX’s native token rose more than 21% following the approval and is currently trading at $2.42. The on-chain vote came nearly a month after the DEX’s held a Snapshot vote to gauge the community’s sentiment towards such a proposal. The vote was approved with over 91% in favor.
The latest change is part of Wintermute’s V4 Vanguard post which laid out a 6-fold plan to make the DEX a sustainable and neutral trading powerhouse. The plan includes reducing trading rewards, adjusting maker and taker fees, introducing a market maker rebate program, removing trading fee discounts, implementing a yearly reduction in token emissions and amending the distribution of rewards, and finally, introducing allocations for trading rewards per market.
On June 20th, dYdX, the decentralized derivatives protocol and exchange, announced that its community had approved a proposal to reduce trading rewards. After the announcement, the price of the dYdX token jumped by over 21%.
dYdX is a protocol that enables traders to enter into direct and trustless decentralized derivatives agreements. It is designed to enable customers to easily trade derivatives as tokens, including perpetual swaps, options, and margin trading.
The recently approved proposal seeks to reduce the current reward scheme of 5 dYdX tokens for every 100 transactions. This specific reward scheme was implemented to incentivize liquidity in the exchange. However, dYdX felt that the scheme was no longer necessary and thus settled to reduce it. After the announcement of the proposal, dYdX announced that its community had unanimously approved it.
This decision was met with positive sentiment from the cryptocurrency community and notably sent the token price up by 21%. Analysts attribute this surge in value to the community’s strong show of faith in the strategy of the project. It also speaks to the fact that traders now consider dYdX as a legitimate platform for trading derivatives.
The success of this proposal is a testament to dYdX’s ability to listen and respond to their community’s feedback. By proactively engaging with their customers, this underscores their commitment to the project’s mission of building a universal and trustless derivatives protocol.
The success of this proposal serves as another step forward in dYdX’s attempt to become the go-to platform for blockchain-based derivatives trading. With more features and innovative products on the roadmap, this could be just the beginning of a strong future for the project.