- dYdX will use 25% of net protocol fees to buy back DYDX tokens from the open market.
- DYDX surged 8% after the buyback news but remains 84% below its all-time high price.
- 85% of DYDX tokens are unlocked, with emissions set to drop by 50% in June 2025.
DeFi protocol dYdX has announced the launch of its very first token buyback program. The protocol will create a pool to extract 25% of its net protocol fees, to buy DYDX tokens from the open market every month starting today.
This has already had an immediate effect on the price of the token. DYDX escalated almost 8% after the announcement, getting to $0.715. Despite this, the token remains down 51% for the year and 84% off its all-time high of $4.51 on March 2024, as shown by data on CoinGecko.
dYdX Community Approves Buyback as Part of Wider Ecosystem Changes
The buyback program was initiated through a community-led governance proposal. This new structure sees 25 percent of net protocol fees dedicated to the monthly DYDX buying and staking. This is intended to decrease the token’s circulating supply and enhance network security by strengthening the validator incentives.
The protocol will also run a 25% buyback allocation along with staking rewards comprised of 40%, MegaVault Original liquidity at 25%, and Treasury SubDAO to support financial sustainability initiatives at 10%. Also, the community is talking about an increase in the buyback allocation, it could increase up to 100% of net protocol fees in the future.
This announcement comes at a crucial time for dYdX as it has been growing its tokenomics and ecosystem. The protocol saw a grand total of $270 billion in trading volume and $46 million in net protocol fees across 150 markets in 2024. Since 2021, the total cumulative volume has crossed the $1.46 trillion mark.
Several major upgrades for dYdX are anticipated to be tied to the buyback program. The IBC Eureka upgrade will power spot trading, multi-asset margining, and support for EVM. It’s also expanding its mobile trading platform with dYdX Unlimited which went live in November 2024 and a brand-new mobile app in February 2025.
Token Unlocks Nearing Completion as Bridge Shutdown Looms
This introduction of the buyback program comes during a time when DYDX token emissions are set to slow. DYDX tokens have already been unlocked to 85% as of the 1st of March 2025. Starting from June 2025, emissions will decrease by 50% and all token unlocks will end by June 2026.
Also in 2023, dYdX moved from Ethereum to its own Layer 1 blockchain which has significantly changed the token ecosystem. As of writing, 86 percent of DYDX is on the dYdX Chain, whereas about 14 percent remains on the Ethereum network as ethDYDX. By June 2025, the Ethereum-dYdX cross-chain bridge proposal is aimed at ending support. If approved, unbridged tokens on the dYdX Chain could essentially be taken out of circulation.
The dYdX Community Treasury, which holds roughly 190 million DYDX tokens—around 19% of the total supply—remains reserved for future community-driven initiatives. This fund is expected to support new developments aimed at scaling and sustaining the protocol over the long term.
Despite these efforts, dYdX has faced a significant decline in total value locked (TVL), which has fallen to $279 million from its all-time high of $1.12 billion. The migration away from Ethereum is cited as one of the key factors behind this decrease.
With the buyback program now active and additional product rollouts on the horizon, the dYdX community continues to reshape the token’s role in the protocol’s evolving ecosystem.
