DYDX Token Rallies After Buyback Announcement, But Retail Remains Unmoved

The token of decentralized derivatives exchange dYdX (DYDX) surged more than 8% in the past 24 hours during U.S. market hours on Monday to $0.72 after the platform announced a buyback initiative.

“Starting today, 25% of net protocol fees will be allocated to monthly buybacks, systematically acquiring $DYDX from the open market and staking it to enhance network security,” dYdX said in a statement.

The company said the move is part of a broader effort to bolster the token’s role in securing the network and stabilizing its economic model amid a prolonged decline. 

The buyback program represents a shift in how dYdX distributes its protocol revenue. Under the new structure, 40% of revenue will go to stakers, 25% will fund the buybacks, 25% will be directed to its liquidity-supporting MegaVault, and the remaining 10% will support treasury initiatives.

“This structure ensures that protocol revenue is strategically reinvested into the ecosystem, strengthening network security, governance, and long-term sustainability,” the company said.

While the program currently dedicates 25% of protocol fees to buybacks, dYdX noted that ongoing community discussions could increase this allocation to as much as 100% over time.

The company also disclosed that as of March 1, 2025, 85% of DYDX tokens have already been unlocked, and token emissions will decrease by 50% starting in June. All token unlocks are scheduled to conclude by June 2026.

Additionally, a pending proposal may remove unbridged Ethereum-based DYDX tokens from circulation if they are not transferred to dYdX’s layer-1 blockchain by June.

DYDX retail sentiment and message volume on March 24 as of 6:55 a.m. ET | Source: Stocktwits

Retail sentiment around the DYDX token remained in ‘neutral’ territory. 

Founded in 2017 by former Coinbase engineer Antoni Juliano, dYdX aims to blend traditional financial market features with decentralized finance (DeFi) principles. 

The DYDX token serves a governance function, allowing holders to vote on protocol upgrades and fee structures. Users can also earn tokens through trading and staking in liquidity pools.

Despite Monday’s rally, DYDX remains down 9% over the past month and has fallen 78% over the past year.

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