DYDX Token Soars After Becoming a Layer 1 Token for the dYdX Chain
The DYDX token is soaring after launch of the new dYdX Chain added functionality to the token.
By: Camila Russo •Markets
The DYDX token is soaring as it gains functionality with the launch of the new dYdX Chain.
dYdX's Operations subDAO and its validators launched the decentralized exchange's proprietary blockchain, according to a post on X.
The introduction of DYDX as the Layer 1 native token of the new dYdX Chain implies a fresh functionality for the token, as it will be now staked with validators to preserve network security and aid with the governance of the network.
"This is a significant change from ethDYDX, which is solely a governance token in dYdX v3, to DYDX, a native token powering the dYdX Chain, a standalone PoS blockchain network," the Foundation wrote in a post on its website.
DYDX token jumped almost 6% to a five-month high of $2.5 on the news.
Fees Distributed in USDC
The dYdX Chain, which created its first block on Oct.26, operates as a proof-of-stake blockchain designed using the Cosmos SDK and the CometBFT consensus algorithm.
On the dYdX Chain, all fees collected by the protocol, including trading fees denominated in USDC and gas fees for DYDX-denominated transactions or USDC-denominated transactions, will be distributed to validators and stakers.
The decentralized exchange collected $137M in fees last year.
dYdX Chain uses the standard x/gov module within the Cosmos SDK. This newly adopted system enables any network participant to create a governance proposals, as long as they meet a minimum deposit.
Only staked DYDX tokens can participate in dYdX Chain governance, and validators inherit the voting weight of their Stakers unless a Staker elects to vote on a proposal themselves.
UPDATE: ARTICLE WAS CORRECTED ON 10/27 AT 3:15PM EST TO REFLECT THAT THE DYDX OPS SUBDAO AND VALIDATORS LAUNCHED THE DYDX CHAIN, NOT THE DYDX FOUNDATION.