DYDX Token: Enhanced Utility on dYdX Chain After Transition

Staking and Security

The DYDX token introduces a deeper level of engagement for its holders, allowing them to enhance the network's security through a staking mechanism actively. This participation can take two forms: holders can either step into the role of validators themselves or delegate their stakes to existing validators. The design of the system bolsters the network's defense mechanisms.

As the volume of staked tokens increases, a wide array of validators significantly strengthens the network's resilience against coordinated attacks.

Governance

The migration to dYdX V4 heralds a shift towards a more democratic governance system, empowering DYDX holders to directly influence the network's future through proposal submissions and voting.

This evolution significantly enhances the token's functionality, transitioning from its traditional roles to play a key part in shaping the dYdX Chain's strategic development. Since the beginning of 2024, the number of governance votes totalled 52, compared to 30 for the entire 2023.

Economic and Reward Mechanisms

As mentioned, the dYdX Chain's economic framework rewards validators and stakers with 100% of protocol fees. This reward system motivates continuous participation and underpins the network's expansion and long-term viability.

It also ensures a steady development trajectory and strengthens security through widespread and engaged stakeholder support.