This is the 14th edition of the dYdX Epoch Review, presenting updates from the dYdX community and ecosystem. To learn more, join us on Discord, Twitter, and the Community Forums.

A summary of the epoch highlights can be found in this deck and video below.

Key Metrics

Performance Indicators

For Epoch 13 (August 2, 2022 15:00 UTC - August 30, 2022 15:00 UTC), no addresses were identified as wash trading.

Trading Rewards

3,835,616 $DYDX were earned over the course of Epoch 13 and will be distributed to 3,292 traders. This is a significant decrease from Epoch 12 where 6,060 traders were eligible for trading rewards. The decrease in traders eligible for rewards is in part attributed to dYdX Trading announcing free trading for up to $100,000 per month.

Source: Metabase Community Dashboard

At the start of Epoch 14, the trading rewards formula was simplified to w=f. Learn more about the trading rewards program in our documentation, or our blog posts.

Liquidity Provider Rewards

1,150,685 $DYDX were earned over the course of Epoch 13 and will be distributed to 58 addresses who were eligible for LP rewards in Epoch 13. Competition in the pool increased compared to the previous epoch where only 50 addresses were eligible.

Source: Liquidity Provider Rewards Dashboard

Market makers meeting the 0.25% threshold in Epoch 13 are now eligible to earn rewards in Epoch 14. 53 addresses (38 existing and 15 new) did more than =>0.25% of maker volume in Epoch 13. Learn more about the LP Rewards in our documentation, or our blog posts.

Source: Metabase Community Dashboard

Liquidity Module

$111.2M $USDC from 636 users was staked to the Liquidity Staking Pool. This is an increase from the $100M $USDC staked in Epoch 12. However, at the start of Epoch 13, only $68M $USDC however is actively staked and earning rewards, as compared to $74M $USDC at the start of Epoch 12. This can be attributed to the Snapshot poll to wind down the borrowing pool and turn off rewards generated by staking $USDC to the Liquidity Staking Pool.  68 users requested to withdraw before the Blackout Period in Epoch 13. These inactive USDC funds can now be withdrawn and are no longer earning $DYDX rewards. Users must request to withdraw their funds before the Epoch 14 Blackout Window (last 2 weeks of the epoch) to withdraw their funds starting in Epoch 15.

Source: Ethercan

3 market makers have borrowed $22.1M $USDC from the staking pool. 2 market makers borrowed $110K, while one market maker has borrowed $22M $USDC. The decrease in borrowed funds coincides with Snapshot poll to wind down the borrowing pool.  Learn more about the trading rewards program in our documentation, or our recent blog posts.

Source: Dune

Safety Module

38.7M $DYDX from 3,200 users was staked to the Safety Module. This is an increase from Epoch 12 where 35.4M $DYDX was staked. The top 2 stakers account for over 32% of staked $DYDX. 281 users requested to withdraw before the Blackout Period in Epoch 13, as compared to 195 users in Epoch 12. This increase in users requesting to withdraw their $stkDYDX can be attributed to the snapshot on simplifying the trading rewards formula which passed, where the stkDYDX component was proposed to be removed. These inactive $DYDX funds can now be withdrawn and are no longer earning $DYDX rewards. Users must request to withdraw their funds before the Epoch 14 Blackout Window (last 14 days of the epoch) to withdraw their funds starting in Epoch 15. Learn more about the Safety Module in our documentation, or our blog posts.

Source: Etherscan

Community Treasury

Approximately 766,703 $DYDX vested in the Community Treasury over the course of Epoch 13. The Community Treasury now holds 35,424,645 vested $DYDX tokens.

In Epoch 5, Reverie officially launched the dYdX Grants Program (“DGP”) with 752,000 $DYDX transferred from the Community Treasury to the Grants Committee multi-sig. On August 7, the dYdX community unanimously voted in favor of transferring an additional 2,582,000 $DYDX to the dYdX Grants multi-sig to launch DGP v1.5. Learn more about the community treasury in our documentation.

Circulating Supply

13.3% of the total $DYDX supply (excluding unearned Retroactive Rewards transferred to the Treasury and the $DYDX vested in the Community Treasury) is considered liquid at the end of Epoch 13. Learn more about the $DYDX allocation in our documentation.

dYdX Governance

On-chain DIP

• dYdX Grants v1.5: On August 8, the on-chain DIP to launch v1.5 of the dYdX Grants Program (DGP) with $5.5M $DYDX passed with unanimous consent from the dYdX community. 28.5M $DYDX from 219 addresses voted in support of launching DGP v1.5, and 2,582,000 $DYDX was transferred from the community treasury to the dYdX Grants Trust multi-sig managed by the Trustees of the dYdX Grants Trust. Additionally, 2 Trustees were replaced on the dYdX Grants Trust.

Off-chain DIPs

• Revising the Trading Rewards formula: In Epoch 12, the dYdX community almost unanimously voted in favor of revising the trading rewards formula to the proportion of total fees paid. On August 12, SLN Capital submitted an off-chain DIP and the trading rewards formula was updated to be based on fees (w=f). On August 15, the dYdX Foundation reverted the formula change to the trading rewards formula based on feedback from the dYdX community. Many dYdX community members expressed that the formula change was unjust because it took place in the middle of Epoch 13, there was insufficient notice and inconsistent information. In Epoch 13, trading rewards will be distributed as per the pre-existing formula according to open interest, fees paid, and $stkDYDX. The trading rewards formula was updated at the start of Epoch 14. You can learn more about the trading rewards formula in our documentation.

Snapshot Polls

• A Further Step Towards More Equitable LP Rewards: On August 11, SLN Capital posted a snapshot poll following up on the DRC to revise the LP rewards formula to:
• ///Change the weights for non BTC/ETH markets to v = 0.6, d = 0.35, and s = 0.05.///
• ///Change the weights for BTC/ETH markets to v= 0.8, d = 0.15, s = 0.05.///
• ///Reduce the rewards paid for BTC/ETH to 10%/10% rather than 20%/20%.///
• The poll ended on August 15 and there was almost unanimous support from the community, where 23M $DYDX (505 voters) voted “Yes” to revise the formula and 12K $DYDX (40 voters) voted “No”. The result of the vote fulfilled the minimum requirements for binding snapshot votes. Next, a dYdX community member must submit an off-chain DIP to formalize the change. The formula revision will likely be effective at the start of Epoch 15, which starts on September 27th, at 15:00 UTC. Read more about the DIP lifecycle in our documentation.

Forum Discussions

• Ambassador Program Continuation: The dYdX Foundation posted a DRC about the continuation of the Ambassador Program for a second Season (September 1 - November 31). 13 Ambassadors and 5 Burrows (Analytics, Governance, Media, Risk and User Onboarding & Education) have expressed interest in continuing as dYdX Ambassadors. Based on any community feedback, a Snapshot vote will be created by the Ambassadors to determine whether the Ambassador Program should continue into Season 2 and beyond.
• Add BiLira (TRYB) on dYdX: BiLira posted a DRC to add BiLira (TRYB) to the dYdX exchange. TRYB is a Turkish Lira backed stablecoin, and will be the largest non-dollar stablecoin on dYdX from an emerging country. Onboarding BiLira will allow Turkish users to trade on dYdX with only a domestic bank transfer. With over 40 exchanges operating in Turkey, the Middle East’s largest economy and home to around 85M people, the adoption of cryptocurrencies is ever expanding. TRYB tokens are backed 1:1 with TRY fiat reserves, and BiLira (1 TRYB) is always supported by one unit of the reserve currency (1 TRY).
• Moving the dYdX Borrower Pool to TrueFi: TrueFi posted a DRC to restart dYdX’s market maker borrowing program and more efficiently onboard new borrowers. The discussion involves launching automated lines of credit (“ALOCs”) on TrueFi where prospective lenders can provide capital to prospective borrowers. Each ALOC is a lending pool for a single borrower, where the interest rate paid by borrowers is determined by a configurable interest rate curve. For lenders, ALOCs deliver higher utilization and improved liquidity. Lenders can withdraw idle funds at any time and re-allocate them to the best-performing MMs. Lenders generate returns from interest paid by market makers in USDC, along with $DYDX token emissions. This helps with:
• ///Higher utilization of funds and improved liquidity, and///
• ///Uses $DYDX token emissions to allocate capital to the most productive market makers.///
• Other forum discussions: (1) On 19 August, Alucard posted a thread prompting discussion on Reverie’s management of the funds for DGP v1.5. Several dYdX community members complained that Reverie should have diversified funds sooner. (2) The new “Meet the Delegates'' series by the governance ambassadors helps the dYdX community to get to know their delegates! Following up on the first 2 episodes, episode 3 features Vitalii, an endorsed delegate for the dYdX ecosystem who has been actively engaging Russian-speaking communities and onboarding them onto dYdX. See more details on Vitalii on this tweet thread and on this blog post. (3) The Analytics Burrow has built a native analytics dashboard to unify dYdX data into a powerful and user-friendly website. dYdX Stats holistically captures data from the entire ecosystem and curates it in a way that benefits all stakeholders. dYdX Stats introduces a best-in-class dashboard setup which will be directly integrated into the dYdX online presence, benefiting traders, investors, and broader community members alike. (4) On a weekly basis, the dYdX Foundation will start sharing metrics around:
• ///Trading and token metrics,///
• ///Trading rewards,///
• ///Both the safety and liquidity module, as well as///
• ///Voting metrics for both off-chain snapshots and on-chain DIPs.///
• See the weekly updates here. The dYdX Foundation welcomes the community to provide feedback on what other areas would be worth analyzing and surfacing.
• Epoch 13 ended on August 30 at 15:00 UTC. Epoch 13 rewards will be claimable here on September 6, at 21:24 UTC (7 days after the end of the epoch plus a 6 hour delay). Once tokens have been claimed, they can be transferred, staked to the Safety module, or delegated to dYdX governance.

What’s Next?

• Epoch 13 has ended. Welcome to Epoch 14! Epoch 14 started automatically on August 30 at 15:00 UTC and will end on September 27 at 15:00 UTC.
• The Merkle root was proposed on-chain on August 30 at 21:24 UTC and the 7-day waiting period has begun. Epoch 13 rewards will be claimable here on September 6, at 21:24 UTC (7 days after the end of the epoch plus a 6 hour delay). Once tokens have been claimed, they can be transferred, staked to the Safety module, or delegated to dYdX governance.
• The Merkle tree data, which is a list of (address, reward) pairs, is available here. Under the hood, the Merkle Distributor smart contract (0x01d3348601968aB85b4bb028979006eac235a588) will distribute $DYDX token rewards according to a Merkle tree of balances.

dYdX Ecosystem

• DGP update: In the first round of funding since the on-chain vote for DGP v1.5 passed, the DGP has approved 6 grants for a total of $331,500 in funding. Grants include dYdX Merch, $DYDX token research, a Cosmoverse sponsorship, a dYdX Academy Page Project Manager, a research on risk parameter framework, and a Hummingbot Market Making Bots tooling guide.
• Delegation: See the full list of Endorsed Delegates here. In addition, the governance burrow started a ‘Meet the Delegates’ series, where delegates were introduced and asked questions by the community. Read about the summary of the first, second and third episodes. If you hold $DYDX and/or $stkDYDX but have no time to review proposals, consider delegating the proposing power and/or voting power of your $DYDX and/or $stkDYDX to one of the 22 Endorsed Delegates.
• Hedgies allocation: dYdX Foundation announced that 22 out of the dYdX Foundation’s 205 Hedgies have found new homes with dYdX community members! Read more about it here.
• Ambassador Program: See the updates from each burrow below.
• ///User Onboarding & Education Burrow///
• ///Risk Analysis Burrow///
• ///Governance Burrow///
• ///Media Burrow///
• ///Analytics Burrow///
• ///Student Burrow///

dYdX Trading Updates

• On August 30, dYdX Trading announced that they have updated their compliance settings to block less than 0.1% of wallets connected to the exchange which had interacted with Tornado Cash, which was recently added to the U.S. Treasury’s sanctions list. If you believe your account remains incorrectly blocked, please reach out to support@dydx.exchange.
• On August 23, dYdX Trading released a blog post on V4 Milestones. dYdX Trading announced the completion of  Milestone 1 - Developer Testnet. So far, the dYdX Trading V4 team has achieved 500 order placements per second and 50 trades per second.
• On August 11, dYdX Trading posted more information about the issues stemming from Tornado Cash which caused many wallet addresses to be blocked from accessing the exchange. Many accounts were blocked because a certain portion of the wallet’s funds (in many cases, even immaterial amounts) were associated at some time with Tornado Cash, which was recently added to the sanctions list by the U.S. Treasury’s OFAC. Adjustments have been made within the limits of dYdX Trading’s compliance policies, that have unbanned certain accounts. dYdX Trading will continue to try to limit flagging and track this moving forward.
• On August 3, dYdX Trading announced a server migration which caused the exchange to be inaccessible to users, and orders were not filled from 10:00 am EST to 12:00 pm EST. API traders had to delete the orderbook and recreate it again.
• On August 1, dYdX Trading announced free trading for users who trade below $100,000 per month.

New Features

• On August 12, the dYdX academy released a video on cross margins and isolated margins.
• On August 5, the dYdX Academy released a video on bracket orders.
• Want to transfer $USDC between accounts without paying gas fees? Read more about the create_transfer API here.
• Gasless deposits are live. The minimum threshold is $500 USDC for your first deposit and $1,000 USDC for subsequent deposits. Read more about it here.
• Want to practice your trades with no risk? Head here and practice today!
• To increase responsiveness about language and localization issues, dYdX Trading Inc. and dYdX Foundation created the 🌎#┃issue-reporting channel on Discord.
• Check out Hedgie Displays - animated derivative NFTs to be used for physical video displays by only the owner of the respective Hedgies NFT.

Social

• On August 31, the ‘Depth and Spread’ podcast released its third episode on the ‘Anatomy of a Trade’ with CMS holdings. Listen to the episode here.
• On August 26, the dYdX ambassadors hosted a poker session as part of the POAP Hunter event.
• On August 22, dYdX Trading announced the Employee Referral Program. Earn $15K for referring a candidate that dYdX Trading hires. Be sure to review the terms and conditions here.
• On August 23, the dYdX Foundation posted the mid-Epoch governance review for Epoch 13, which summarizes all things governance related for Epoch 13. See the tweet thread here and the blog post here.
• On August 22, the dYdX Foundation launched ‘The Trading Floor’ on gather, a community event where traders and the community could discuss everything crypto, DeFi, DAOs and more.
• On August 20, the dYdX Foundation launched a ‘League of Memes’ competition for the community, where they can submit memes or fan art about Hedgies using their own Twitter account, and where they can upvote for the best submissions. Voting ends on September 3, and the top 3 submissions will win Hedgies. Winners will be announced on September 9 on Discord.
• On August 19, after the trading rewards formula change had been reverted with community feedback, the dYdX Foundation announced that they will continue to send out multiple reminders on the timelines for such changes to ensure that the community and LPs have sufficient notice and time to withdraw their $stkDYDX and/or make changes to their trading strategies.
• On August 17, the dYdX Foundation released a blog to summarize the key takeaways from episode 2 of the ‘Meet the Delegates’ series, where Moe_L, an endorsed delegate for the dYdX community was interviewed.
• On August 17, the dYdX Foundation hosted an AMA session with the TrueFi team to run through the details of their proposal to move the borrowing pool to TrueFi. The key takeaways from the AMA were documented in this blog post.
• On August 12, the dYdX Foundation announced that a community member had indicated that they may submit an on-chain DIP to turn off rewards to the liquidity staking pool.
• On August 12, the dYdX ambassadors hosted a POAP Hunter Trivia night, where the top 25 participants earned a POAP for the POAP hunter event.
• On July 30, the dYdX ambassadors announced that they are running a POAP Hunter event in August. For this, the community will have the opportunity to earn up to $500 USDC.
• Want to learn more about dYdX, DeFi, and much more? Check out the dYdX Academy and watch for updates at 🎓┃dydx-academy on Discord.
• Looking for more information about the dYdX ecosystem? Check out the dYdX DAO info docs here.
• Make sure you RSVP to the following events: Hedgie Huddle, and the Epoch 13 Review and AMA.