The dYdX community has voted to stake 20 million dYdX tokens, worth approximately $60 million, using Stride’s staking service for Cosmos blockchains. The decentralized exchange platform, dYdX, allows users to trade perpetual futures contracts and recently launched its own independent blockchain, dYdX chain, built on the Cosmos blockchain. The blockchain operates independently from the parent company, with governance overseen by dYdX’s DAO. Through the DAO, dYdX holders can participate in protocol decisions and upgrades, contributing to a community-driven trading experience.
The recent move to stake 20 million dYdX tokens with Stride’s staking service for Cosmos blockchains was approved by the dYdX community in a vote with 81% participation and 91% support. Stride provides liquidity for staked tokens, allowing users to liquid-stake their tokens from any Cosmos chain and earn a yield. This helps enhance liquidity and enables stakers to trade coins regardless of available buyers or sellers. The goal of the proposal is to improve economic security, encourage stake diversity in the community, and expand the number of stakeholders involved in governance decisions.
The proposal aims to continuously use the yield from fees generated to buy more dYdX tokens via Stride, which are then returned to the treasury. This process helps boost the economic security of the network and enhances stake decentralization. By evening the voting power of validators, the proposal strengthens the protocol’s resilience to network outages and concentration of voting power. The implementation of the proposal increases the overall voting power required to control the protocol, contributing to the decentralization and community-driven trading ethos of dYdX.
Some users have expressed skepticism regarding the proposal to stake dYdX tokens with Stride, as it may result in a lower Annual Percentage Rate (APR) for current staking users. This could potentially make the token less appealing to new investors, impacting the token’s value and the growth of dYdX in the long term. Additionally, reducing the APR for stakers might temporarily increase validator fees, which some users believe does not align with the community’s best interests. However, Stride has offered a 2.5% discount on its usual fees, minimizing the impact on APR and emphasizing the proposal’s benefits for the economic security of the dYdX chain and stake decentralization.
The approval of staking 20 million dYdX tokens with Stride marks a significant step for the dYdX community, with an overwhelming majority supporting the proposal. The move enhances the economic security of the dYdX chain and promotes stake decentralization, aligning with the platform’s commitment to decentralization and community-driven trading. By leveraging Stride’s staking service, dYdX aims to expand the involvement of stakeholders in governance decisions, strengthen the protocol’s resilience, and provide improved liquidity for staked tokens on Cosmos blockchains.
