On April 19th, the dYdX Foundation hosted a discussion on Discord regarding general updates, current governance proposals, and an Epoch 8 review. The discussion was followed by a community hangout and AMA with the dYdX Trading team.

A redacted transcript is available below:

James (dYdX Foundation): Let's get started. Thanks for tuning in for this. I know there are 60 of you currently, so that's awesome that the numbers keep increasing month on month.

TL;DR, we'll go through everything Epoch 8 today and then get David, Corey, Antonio, and Carl from grants to talk through their respective processes and what's been happening on their end. We'll then open up the stage for an AMA at the end.

In terms of POAPs for today's attendants, we're going to open up a text channel on Discord, where @Alucard (Community Manager) will post the POAP link, where you guys can screenshot, and/or claim. Make sure you do a screenshot as well, just in case you can't claim the POAP at that particular time, so we can retroactively reward you for that.

Just starting with a couple of housekeeping rules as usual. Let's keep the questions posted in the Discord. If you've got any questions that you want to ask, please save it and if you're willing to ask the team directly, please save it to the end and we'll invite you up on the stage. Keep your questions pertaining to dYdX, and the ecosystem as a whole. Please refrain from using or speaking about price at all. If so, you will be banned from the server and kicked from this AMA.

Let's start with David. David, if you want to start with everything Epoch 8 and then we'll work through the questions.

David (dYdX Foundation): Great. Thanks, James. Good morning, good afternoon, everyone. Similar to past Epoch reviews, I'll be going through a number of highlights and milestones over the course of Epoch 8. As usual, we'll be posting a blog post with all of this information, if we haven't already.

Just to review some of the highlights and KPIs. Over the course of Epoch 8, total volume on the dYdX protocol was approximately $63 billion, with average daily volume decreasing slightly to $2.3 billion. Overall volume was flat from the prior Epoch. Ending Open Interest increased to $1.03 billion and TVL decreased to $898 million at the end of the Epoch. Overall, very strong results given a lot of the market volatility and market decline. We continue to see a lot of volume and activity on the protocol, which is encouraging.

In terms of rewards, over the course of Epoch 8 there were approximately 9,200 unique wallets that earned 5.8 million $DYDX through trading LP and staking rewards. In total, there are now 49,000 unique wallets that have previously earned $DYDX with the retroactive rewards program, trading and liquidity mining rewards. There are currently approximately 22,000 unique wallets that currently hold $DYDX and recently we hit the milestone of 3,000 unique wallets currently holding $stkDYDX, which is an exciting milestone.

Overall, if you look at the number of monthly active traders on the platform, we saw a pretty significant increase relative to the prior three Epochs. I think part of that is largely tied to the launch of the iOS app in beta and seeing active users participate and test out the app, and therefore earn rewards which is really encouraging. Excited to see a lot of other growth campaigns launched by dYdX Trading, and then the dYdX Foundation to try to increase user growth in the protocol more broadly.

In terms of the liquidity provider ("LP") rewards, there were 40 addresses that were eligible for LP rewards, with the majority earned by two market makers. This kind of concentration of rewards is something that's been consistent for the last few Epochs. We have seen a lot more market makers and addresses eligible for these types of rewards since the community voted to decrease the threshold to 25 basis points. Overall, I think this is, in particular, an area that we've seen a lot of activity on the governance forums, a potential way to change the LP rewards formula to make the pool more competitive.

In terms of the number of wallets and market makers that were eligible for rewards in Epoch 8, 44 addresses did more than 25 basis points in maker volume, and therefore are eligible for rewards in Epoch 9.

For those following the forums, earlier this week Wintermute created a governance thread, with a proposal to revise the LP rewards formula with several objectives. The first is, to redistribute the rewards more equitably to incentivize competition. The second objective was really to incentivize liquidity that is beneficial for the platform over the long run. I encourage everyone to check out that thread. I think it's an open book and it's great to see a lot of market makers and active participants provide feedback and some thinking in terms of that rewards formula. It does seem like there is some consensus evolving. The first is, introducing maker volume to the LP rewards formula, as well as reducing the weight of depth, spread, and $stkDYDX in the calculation of the LP rewards.

The specific variables people are still debating, but it does appear like there will be a vote at some point in this Epoch or next, basically revising the LP rewards formula and hopefully making the pool more competitive and driving sustainable liquidity on the platform. So, I think that's a really exciting outcome, and it's great to see community members participate in very meaningful changes to the community.

In terms of the Liquidity Staking Pool, at the end of Epoch 8, there were 378 million $USDC staked to this pool from 724 users, of which there are 257 million $USDC, which is active and earning rewards. So far, we've seen five market makers borrow $USDC from the staking pool, but we still haven't seen a ton of activity and utility of that capital. Overall, the pool has been relatively flat since the last Epoch and, it's something that we think the community should spend more time thinking about. The community could consider the utilization and some of the incentives that the community is spending on to incentivize underutilized capital in that pool.

In terms of the safety module. At the end of Epoch 8, it was 30 million or so $stkDYDX from 2,900 or so users. We've seen Epoch over Epoch, this number continued to increase, which is great to see, both in terms of the total amount of $DYDX and the number of stakers. There's approximately 35% of the circulating supply of $DYDX that is currently staked to this pool, and it's great to see longer term alignment and double-digit APR's generated for stakers to that pool and acting as the ultimate backstop to the protocol.

Lastly on the supply side, a big milestone was reached in this Epoch. Over 10% of the total supply of $DYDX, excluding unearned retroactive rewards, which were transferred to the treasury, is now considered liquid at the end of Epoch 8. For those familiar with the governance process, the long time lock vote requires a 10% quorum for proposals to pass. It's great to see now that more than 10% of the supply is really in the hands of the community, which now can make any changes to the protocol without investors and/or locked tokens participating in the governance process. Overall, a major milestone relative to past Epochs.

We have a few updates on the governance side. The forums continue to see a lot of activity. We've seen the pace and level of engagement significantly increase over the last few weeks. We saw the community nearly unanimously vote in favor of launching the Guernsey Purpose Trust contemplated in the Legal Framework for Non-US DAOs that the dYdX Foundation published. The Grants Committee and Carl can maybe speak more to this, but, it's great to see the community rally around a legal wrapper for the Grants committee as "Trustees" and Reverie as the "Enforcer" to execute a Purpose Trust Instrument. This is a huge milestone for the community, for the dYdX grants program (the "DGP") and DAOs more broadly.

Another proposal worth mentioning is the proposal created yesterday by Xenophon Labs. Xenophon Labs created a Snapshot Poll to revise the trader rewards formula with two key changes to (1) increase the fee weight parameter from 67% to 80% and (2) decrease the open interest weight parameter from 28% to 15%. Voting started a few hours ago on Snapshot and will end in approximately four days. This vote is off-chain and binding and is based on a lot of the fantastic research that Max Holloway and the Xenophon Labs team put together. So, for those of you who haven't read that, highly encourage you to check that out and I think Max and team have set a new standard for community contributions and community involvement with driving meaningful changes to the program.

A few more updates on my side. The dYdX Foundation a few weeks ago posted an open call for Endorsed Delegates. So far, we've seen nine Endorsed Delegates that have completed all the applications and onboarded, which is great to see. We encourage everyone to check out their applications and if you're interested in participating in governance, but don't know where to start you can always delegate your tokens to Endorsed Delegates who are, individuals, university blockchain clubs, and other subject matter experts who are looking to consolidate voting and/or proposal power and continue to be active within the community.

On the dYdX Foundation side, we announced earlier this week our plans for an Ambassador Program. I'm sure there are a bunch of questions there, but effectively we've been spending a lot of time thinking about how we organize all of the energy within the community into various Burrows or working groups to support the DAO. At launch, we'll have six Burrows: analytics, governance, media, risk analysis, student, and user onboarding.

If you're interested in working with like-minded individuals, if you're excited about dYdX V4 and want to contribute to the DAO, we encourage you to fill out the expression of interest form posted on Commonwealth. We're targeting a launch of season 0 for a subset of ambassadors, starting May 1st. We are targeting 10 to 15 ambassadors in this trial period. I think we've had over 1,400 applicants in the last three days alone. Overall, it's fantastic to see the level of enthusiasm and excitement for individuals to get involved in the program. We'll be reaching out to ambassadors that may be a good fit in the next two weeks or so.

So those are some of the major updates that I wanted to share overall on the Epoch in terms of some last administrative questions. Epoch 8 ended on April 12th at 3 PM UTC. The rewards will be claimable on April 20th at 00:13 UTC. So that's seven days after the end of the Epoch, plus a nine-hour delay. Once tokens have been claimed, they can be transferred, staked to the safety module, or delegated to dYdX governance.

That's all on my side. Thanks, James.

James (dYdX Foundation): Awesome. Thanks, David. Next, we can start with Marc as I'm aware he may have to leave soon.

So quick question, Marc. I know this has been on the community's mind for a while, but will users that are currently banned from using the protocol due to location be free to use the protocol once V4 is released?

Marc (dYdX Trading): Hey everyone, and thanks, James. Good question.

We're going to look at this issue at the time V4 is released and make sure that whatever decision we make, it's done in a way that complies with the law. Currently, we think that it's important for legal reasons that we do block certain countries from using the exchange. We'll be evaluating it in the same way when V4 is launched and make a decision around that.

James (dYdX Foundation): Brilliant, thank you for that Marc. Now opening the floor to the dYdX Trading Inc. ("dYdX Trading") team. So Antonio and Corey, what's the V4 progress now? Is it possible for the community to have any updates on this and how excited is the team for the launch of V4?

Antonio (dYdX Trading): Thanks, James. I can take this one. We are very excited about the launch of V4. This is quite literally our top priority as the company is building out the V4 protocol. It's still in what I would call the late phases of the research phase. Though we do have a pretty good idea at a high level at this point of what we're going to build and we're just kind of fleshing out, from a technical architecture perspective, exactly the details of what we're going to build.

Just this week, we started coding the repository that will make up the V4 protocol and we're excited to share more info on that before too long. Suffice it to say it is our top priority on the tech and engineering team right now and we're making good progress.

James (dYdX Foundation): Awesome. That's great to hear. Then the next question, will you implement more ways to store the collateral, so not solely $USDC, but maybe DAI, USDT, or something like that?

Antonio (dYdX Trading): Yeah, this is a really good question. This is something we've been thinking a lot about, especially as it relates to the V4 protocol. We want to support it at some point. I'm not 100% sure yet. This is one of the last things we're going to be working through in the late-stage architecture of V4. It is something that we're speccing out to at least make it easy to add multi-collateral to the protocol before too long, even if it doesn't come out at launch. So, we hear users that this is a huge product advantage and something that we think is important and do want to add to the protocol at some point.

James (dYdX Foundation): Thank you for sharing that. The next question from the community, is how does dYdX view the competitive landscape being that multiple other DEXs have an increasing market share? How do you view that?

Antonio (dYdX Trading): Well, I Tweet a lot about this and I think the most important thing that we all keep in mind is what the goal is here. Our goal is not to become the biggest decentralized exchange. Arguably, we've already done that. I mean, we're pretty close with Uniswap from a trading volume perspective. Our goal really is to become one of the biggest crypto exchanges, period, in the world whether it's centralized or decentralized. If you look at things through that lens, the competitive landscape takes on a much different form versus if you had just kind of confined yourself to thinking about dYdX as just playing in the decentralized exchange space.

Personally, I am not very worried about any of our decentralized exchange competitors. Uniswap seems to be pretty focused on just spot trading and AMMs, whereas we're much more focused on the advanced trading use case with derivatives and targeted at more professional traders. I don't think that any of the other derivatives decentralized exchanges are super credible as competitors.

I'm not saying that there's no way we could potentially lose to them. There certainly is and we have to continue to execute as a team and as a protocol and as a community. I think we have a huge head start and I just really believe that we have the best team and are building the best possible product.

I think the much bigger probability is we never break through to the level of our actual competitors. When I say our competitors, I'm referring to the big incumbents that are centralized exchanges, obviously Binance, FTX, and a few others.

We're small fish at this point, right. We're currently doing about $2 billion a day of volume through the protocol where FTX is currently at around $15 to $20 billion and Binance is like a hundred or so.

The main metric that we've been tracking on the team internally and that we look at this in all hands every week is our percent market share. I want to encourage the community to start thinking more about our percent market share, not just for decentralized exchanges, but across all exchanges in crypto. Currently, I believe that's about 2% or so. If we're going to achieve our goals, we need to get that up by at least a factor of +10 in the next couple of years. That's how I think about the competitive landscape rather than just focusing on our decentralized exchange competitors.

I'm not saying we shouldn't pay attention to them. We are absolutely paying attention to our competitors. If they're doing anything that seems valuable, we'll take a deep look at it and we should adopt that for ourselves or sort of copy things that are working with some of our competitors that are experimenting perhaps more than we are. As long as we just maintain a high level of execution, I'm not super worried about us falling off the pace relative to the competitors on the decentralized exchange side.

James (dYdX Foundation): Awesome, exciting times. Next, dYdX is getting used more and more by crypto Twitter influences, what are your thoughts on purposefully trying to spread more awareness this way from the core team down? Is this a kind of marketing tactic people are focusing on, what are your thoughts?

Corey (dYdX Trading): Yeah, I could take this one. The short answer is yes. This is something that we think could be a larger value driver for us over time. Right now, we do have an affiliate program so we do talk to various key influencers and onboard them to that program.

We are going to be launching the self-service affiliate program a few weeks from now. Anyone who is a trader on the platform will be able to generate their affiliate link. From there, they'll be able to share that link with their friends and followers and such. So, it's going to be vastly easier for us to onboard the long tail of influencers or people who want to spread the word about dYdX and get incentivized to do so. So, that's the first thing.

The other thing is the marketing team here at dYdX is engaging with a marketing firm as well as a PR firm here. The work there is probably going to be started in a few weeks from now as well. That's going to enable us to get a lot greater reach from the PR landscape. So, seeing dYdX across more media across the world whilst also conducting more and more campaigns. This is just digital advertising, but this is also like influencer relationship building across various geographies. We're excited about these partnerships here, and we're going to have a lot more resources to spend on developing them.

Lastly, we're also growing the team internally so we can talk with these influencers more often and have better relationship building and management with them.

In conjunction with the dYdX Foundation, a lot of the Community Managers that the dYdX Foundation has been bringing on have a lot of connections to various influencers in the space as well. We're working with them to connect with various influencers in these key geographies. Putting all those things together, I think we're kind of setting ourselves up to be in a really good spot to onboard a lot more influencers and have that be a core part of the strategy over the next year.

James (dYdX Foundation): Thanks, Corey. That's super exciting. The next question, which is more product focused: is the dYdX app ready for public launch and can you provide any feedback from the launch of the iOS beta?

Antonio (dYdX Trading): It is very close, probably a few weeks away from the public launch. The iOS beta has been going really well. Maybe Corey can provide a little bit more of the actual metrics here, but I believe around 10,000 invites have been extended to users who signed up for the waitlist for the mobile app, which is kind of the most that test flight allows.

We've been getting a huge amount of really good feedback from the community and appreciate everyone who's given product feedback on the app. We're excited to share it with everyone soon. Our goal with the app is to differentiate dYdX. I think at a very high-level nobody has nailed the trading experience for crypto on mobile quite yet. Even on centralized exchanges, I would argue. Certainly, there are a lot of really good desktop trading apps and there are some good apps in crypto like Coinbase, but none of them are targeted at trading specifically.

We want to be the Robinhood, if you will, of crypto trading apps. I think we still have a good amount of ways to go to get there and we'll continue to iteratively improve the app over time, but we do think there's a huge opportunity here and we are pretty proud of the product that we've come up with on the mobile side. And I think it is exciting that this is one of the first mobile apps for trading that can be used for DeFi, especially in a more professional way when you're trading derivatives, but we're excited about the mobile app and it should be coming out publicly in the next few weeks.

James (dYdX Foundation): Awesome. I know V4 is a priority for the dYdX Trading team but is there anything else you guys can disclose or anything on the horizon over the next three to six months?

Antonio (dYdX Trading): Yeah, I'm not sure exactly when we're going to be releasing publicly more on what exactly we are building. We do want some time on the team to just think about it heads down from an architecture perspective and a research perspective, to make sure that we're just coming out with what we feel the best technical direction for the protocol is before revealing it to the community. Of course, we will be open-sourcing everything well before launch and we'll be going live with the test net a bit before launching the main net as well. We do not have much to share right now, but expect something probably in the next three to six months.

I think these big updates to the protocol do take time to build. I think we've shown a really good history of being able to execute consistently faster than pretty much any other team I would argue in crypto, or DeFi at least. I think we've also shown that we're willing to make really big, bold bets from a technological perspective. All I'll say for now is I would expect just a big, bold bet on the technical side as well and that's really how we're thinking about the technical decisions behind V4.

Everything comes back to what is the goal for what we're building at dYdX and we want to build something from the technical side that can grow to the level where we're starting to compete with centralized exchanges more directly. For the V4 protocol, not every single feature that we want will come out on launch day, but we'll continue to iteratively improve it to build an excellent platform to continue to improve exponentially from a product and technical perspective.

James (dYdX Foundation): Thanks for that update, Antonio and Corey.

Moving on then to the Grants team. Carl, would it be possible just to have an update on all things Grants and what's been happening recently?

Carl (dYdX Grants): Hey, everyone. We just had our ninth round of grants approved for funding by the Grants Committee. That puts us now at 55 individual grants approved and over $2 million in pledged funding. We just hit that milestone of over $2 million now in funding that'll be going out, and we have 48 unique grantees. We're super excited about the progress. We're still seeing lots of applicants come in. We're going to keep adding new RFPs. We're just really excited to keep going and we're seeing a lot of grants getting completed, which is awesome as well.

We'll be sharing more updates this week. We already shared a couple last week and we had Chaos Labs complete their CLI tool yesterday and we'll share additional ones as they come out to look for community feedback. We appreciate all the feedback that we get on the grants projects. A large part of it is iterative in the sense that we want these projects to grow and evolve based on community feedback, given that it's based on user experience. So, we'll be sharing additional updates there.

We released our new branding, which most people got a chance to see, which is a look into the new website that's going to get launched very soon in the next week or so. We are excited about that migration. It's going to create a much better user experience for everybody and we're going to have a place to showcase all the grants, all the grantees and all the RFPs and give the overall experience a great look.

In terms of payments, which is something that I've talked about a lot now, as our grantees know we had these agreements go out recently and that was one of the important steps that we had to take to move forward. Now we're finally in a good place to get the first rounds of payment out this week. People should start seeing on-chain activity and these grants getting funded, which again is also very exciting given that we've had people working hard without actually getting their funding yet, which just kind of speaks to the community as well.

James (dYdX Foundation): Thanks, Carl. It's awesome to see such high-quality grantees leveling up the dYdX ecosystem. If any of the community also feel like they can provide any value that way I encourage you to get in touch with the team there and/or interact with the team on Discord to find out more information.

Separately, I will say now that the POAP claiming is live. If you head into the #dYdX-general channel and you want to claim your POAP, then please do. It's streamed on Twitch, so you'll need to scan the QR code there. It'll be live for the next half an hour. Please don't share that link out. It'll be only available for the 180 dYdX community members who are in the audience. If you want your POAP for the first Epoch POAP, then please head to that channel now and claim it.

Next, we can move on to questions for the dYdX Foundation team. First, do I have a chance of participating in the Ambassador Program if I do not speak English at a conversational level, but I can read and write in English?

David (dYdX Foundation): James, as the mastermind and architect of the Ambassador Program, I think you're best positioned to answer these types of questions.

James (dYdX Foundation): Thanks, David. Yes, we want ambassadors coming from all walks of life. You do not need to speak English at a fluent level. There will be plenty of conversations happening in written form, through Discord and Clarity, the architecture that we are using for the Ambassador Program. In brief, no, it doesn't restrict your participation in the Ambassador Program. It might just mean that doing some tasks might require a little bit more effort from you. Overall, participation in the Ambassador Program won't be limited to community members who speak English at a conversational level.

Next, how does the dYdX Foundation plan to distribute its top 30 Hedgies NFT by rarity?

David (dYdX Foundation): Yeah, so that's a great question. The dYdX Foundation posted a blog post on Commonwealth with some ideas on how we plan to distribute the 205 Hedgies that we've purchased from dYdX Trading.

To date, we've distributed eight or nine already to active members of the community and we published the rationale behind those distributions. Internally we call this governance mining. The best way to earn one of these Hedgies is to get active in governance, display unique participation and drive value for the protocol and ecosystem or community more broadly. In terms of the 30 rarest Hedgies, we separated those from the pool that we are distributing on an ongoing basis and we are reserving those Hedgies for exemplary community contributions.

I think we haven't landed on how we plan to distribute those. Certainly, we welcome the community's feedback on what's appropriate. I know there was one thread on Commonwealth on the potential to allocate one of those Hedgies to a community member, which we certainly value and welcome. Again, given that we only have 205 Hedgies to distribute, how do we think about distributing the rarest ones is an open question.

Looking forward to working with the community and getting feedback from them on any views on how that should be done.

James (dYdX Foundation): Awesome. Thanks, David. Does the dYdX Foundation plan to transition its employees over to the DAO eventually? If so, how early do they expect this to happen?

David (dYdX Foundation): Yeah, I think this is a fantastic question and a strategic question.

In our mind, the dYdX Foundation has the mandate to accelerate the transition towards community control, self-sustainability, and ownership over the dYdX protocol. If we're successful, and when we're successful, there's a world where the dYdX Foundation no longer has a purpose. That's when the dYdX DAO is in a fully mature state.

I feel it's still a while away before that's the case, but in this interim period, we're certainly building out the team at the dYdX Foundation. We have a dozen or so roles currently posted on our careers page. We're actively trying to hire Country Leads and Community Managers in international markets to help us grow on a more localized basis and encourage active community members to apply for those roles if you think you'd be a good fit.

At some point, we envision the dYdX DAO to be the main vehicle for the community to drive decision-making around V4 of the protocol. At some point, it really will be in the hands of the community on who is employed by the DAO. If you look at the legal structure that we've worked on for the Purpose Trust, that allows effectively a DAO to hire full-time and part-time contractors. Our view is that at some point, the DAO will employ people globally. That could include part of the staff that is currently employed by the dYdX Foundation. I think that's probably a year or two years, three years away, and right now we're just focused on building out the team, building out the infrastructure and then accelerating the maturity of the dYdX DAO to take control of V4 once that's launched later this year.

James (dYdX Foundation): Awesome. Thanks, David. Finally, when the DAO structure is in place, how does the team view working groups? Has it been decided on what the current working groups will be, or is this all still in process as well?

David (dYdX Foundation): This is like a fantastic question and really at the heart of 'How do we make DAOs work?'

The way that I think about it is we currently have approximately 25,000 or so $DYDX and $stkDYDX token holders. We have 1,300 people who applied for the Ambassador Program. We have a lot of excited community members who want to get involved and participate in some way, shape or form. How do we leverage all of that excitement and talent, and match that with the functional needs of the protocol? The Ambassador Program and some of the burrows that we've envisioned and communicated is a first attempt at trying to form working groups and focus on functional areas that we think are critical for the long-term success of the protocol, but certainly, there will be more and that will evolve.

The big challenge here is how do you coordinate global talent and match that with functional needs. This is still an open area that a lot of participants and DAOs are still really trying to figure out.

We view the Ambassador Program as an experiment, we're going to learn a lot about what works and what doesn't, and then plan to scale that over time as we build out the infrastructure and the tooling to be able to support that workflow, coordination, and payments at scale over the long run.

I would also say it's been great to see several community members also receive funding from the DGP to do some research on what this looks like. We take a lot of inspiration from what other DAOs have done and continue to iterate on that model, but we're still very early in terms of figuring out an optimal structure for DAOs. If this is an area that you are interested in, definitely encourage you to apply for a grant, apply for the Ambassador Program, or feel free to DM me directly and I'm happy to brainstorm about the kind of optimal structures here that may make sense.

James (dYdX Foundation): Thanks, David. I guess I can also double down on that Ambassador Program element. We're viewing this as an experiment for working group structures. So again, if that does interest you and you feel you've got the skills and value that you can provide to the six working groups that we've currently advertised for, then absolutely apply. Equally, you can reach out to any of us in the DMs on Discord and we can chat further.

Okay. So, that finishes off the pre-populated questions. This is now the time to open to the floor and the community to ask any live questions. If you've got a question to ask, just request to speak and raise your hand, and then I'll bring you on stage.

Community Member: Good evening to all. It's been a great AMA. I want to talk about the topic of trading and improving the platform. I'd like to ask about margin trading and your views on wash trading nowadays. I have already read a couple of articles about this and noted that you're paying attention to try and stop wash trading. Can we touch on this point? Another question is about trading partnerships, has this been explored?

James (dYdX Foundation): Okay. So the first question was about wash trading and the second question was just about partnerships on that front. I don't know if Corey or Antonio want to take that?

Antonio (dYdX Trading): Sure. I think we've released some information about this publicly, but we are taking active steps on the centralized order book and centralized matching engine right now to combat wash trading and anyone who is found out to do wash trading will not receive rewards on an ongoing basis. We are actively combating that. This is especially important, especially when there are quite a lot of incentives through liquidity mining to be able to trade.

James (dYdX Foundation): Thanks Antonio, another question is coming from Starkwhale, let's bring him up to the stage.

Starkwhale (Community Member): This is kind of a contentious question, but it's an interesting one. It comes from a place of interest in the exchange and the value proposition of the team and the longevity of everything in maybe the coming six to nine months. I think we have really good systems in place that we're building out. I think the future is looking awesome. Maybe at the end of 2022, given the macro environment, I think that this is an interesting question to the team and for further discussion in the community. Would the team be open to a bonded $USDC pool for Epoch rewards with the use of a time lock $DYDX APY to combat market sell pressure of $DYDX that we're kind of seeing, whilst also protecting the current exchange value?

David (dYdX Foundation): I'm happy to take this. I'm not sure I fully grasp the exact proposal, but in general, the community has control over the incentive contracts.

Starkwhale (Community Member): The idea would be to open up a $USDC pool that is bonded. If people have a large amount of $USDC, they can put it into the pool and they can draw timed $stkDYDX or APY off that, and then the team can use that $USDC pool as basically a credited account to pay out Epoch rewards. That effectively would remove all selling pressure on $DYDX and the time-locked $stkDYDX could unlock around the time of V4, which of course I think is a strong catalyst for growth within the whole dYdX community.

So on the whole, I see it as a win-win for the team, it's similar to opening up a credit account and then paying credit now, and then knowing in the future that the valuation of the thing you're holding and not paying out is going to be worth more than it is currently. I think it'd be a great opportunity for the exchange as a whole and the community. Also to maybe better safeguard the valuation of both the token from a foundational aspect and to set things up for not paying out so much in token valuations at a current state, but waiting until the valuations are maybe viewed far more favorably due to V4 changes.

I see some upsides to it, but I haven't seen anybody talk about this on the forums. I'll maybe consider going forward with it and talking in governance about it, but I'm also interested to see what the community thinks in general first.

Antonio (dYdX Trading): So it's basically like you have a staking pool and you pay out the liquidity mining, or at least trading rewards in $USDC rather than paying them out in $DYDX, and then presumably you give an inflated supply of $DYDX to the staking pool. Is that kind of the general idea?

Starkwhale (Community Member): Yeah. The $DYDX would be staked. The APY they'd be earning would be staked until about V4, so that there would be a positive pressure on $DYDX at V4. It would be accrued at this point going to V4, so they would just park the $USDC knowing that they're earning that APY, even though the APY is time-staked, which is why it's a bonded $USDC pool.

Antonio (dYdX Trading): Yeah, I think this general idea of paying out what token of payout rewards in, whether that's the token of the protocol in $DYDX, or whether that's some other token or form of value that the protocol requires is a reasonable one to consider. I'll think more about this as a community member and give my thoughts. I think we'd have to think a bit more about the staking pool in terms of whether that's the optimal way to do it. Seems a little bit complicated to me at first, but I'll think about it a little bit more.

Starkwhale (Community Member): I'd be open to talking with Max about this. I think what Max has planned, and I know that some people have supported it, I think you've talked about it positively using $USDC as an adjunct is a good idea, but I don't think it went far enough because the premise is that every Epoch $DYDX is sold and then people are handed $USDC.

I think we should go one step further. Don't sell $DYDX, accrue that $USDC using a bonded staking pool and then at V4, when there's much more positive pressure on that token and much more demand, I believe in general for everything going on, I think that it's going to be a huge moment, a milestone for the exchange. It's going to be an amazing point that the exchange reaches. I think that's a smart time to be trying to cash in those valuations, versus now.

I feel we should be playing from a position of strength and that's a really strong point to play from. People would have interest in staking $USDC knowing that even though their rewards are time-locked until V4, they know that they're going to have something eventually that's worth value, knowing what the exchange is going to be, knowing where it's going, knowing that they're earning it now to enjoy in the future.

So, I see a lot of positives, but it's kind of complicated like you said.

Antonio (dYdX Trading): Yeah. Makes sense. I think from first principles, in terms of considering potentially paying rewards in a different asset or adding in, basically what I think you're saying is some sort of like lockup or staking period to when the community gets the inflated supply of $DYDX is worth considering, whether it's through this or something else.

Starkwhale (Community Member): I'll talk with Max a little bit and I will have a governance discussion. I'll try to get that in governance in the next few days.

James (dYdX Foundation): Thanks, Starkwhale.

David (dYdX Foundation): Starkwhale, the only other thing I would add is these pools have been launched eight Epochs ago. Market structure dynamics have changed over time. It's great to see very active community members like Max, like Chaos Labs, among others, really look more thoroughly at the design and data that's been generated over the last eight Epochs to make decisions. Any change to any pool is really in the hands of the community. So, I think I'd encourage you to certainly think through this idea, put together a thread, try to socialize it, and get feedback. If it's something that the community ultimately likes and advocates for, really anything is possible.

James (dYdX Foundation): Awesome. Cool. I guess we've just run out of time. Thanks to everyone for tuning in. We had over 192 people listen in. I think it's awesome that this is probably one of the only places where you can hold a real frank discussion between the core team and community currently. So, it's awesome to see the types of questions that are being formulated.

Keep up the comments and interaction. One thing that we've said all along is that we're going to be more active on Discord and communicate with as many people as we can whilst being transparent. I guess if there's anything you'd like to see more of, if you think we should change how we run these Epochs, that could make it more interactive, then we're open to your thoughts there. A huge thanks to those who have participated in the iOS beta and the Ambassador Program launch and pushed out media from that.

So, let's end on that note.

If you do want to claim your POAP you only have a couple of minutes to do so in the #dYdX-general channel on Discord. Please head there and claim your code. If you can't claim the code, just screenshot it. Please then either DM or open a ticket on Discord and we'll look to try and answer you there.

As usual, we'll decipher this info, and post it as soon as we can. There's a process involved in the background where we have to upload the audio and then get it transcribed. So, it'll be over the next week or so, and then we'll put it onto YouTube.

So that's everything guys. Have a great rest of your week and we'll catch up soon. See you next Epoch.