This is the 16th 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.
For Epoch 15 (September 27, 2022 15:00 UTC - October 25, 2022 15:00 UTC). No addresses were identified as wash trading during Epoch 15.
Trading Rewards: 2,876,712 $DYDX were earned over the course of Epoch 15 and will be distributed to 2,103 traders. This is a decrease from Epoch 14 where 2,778 traders were eligible for trading rewards. The reduction in the number of traders eligible for rewards is in line with the 25% reduction of trading rewards from 3,835,616 to 2,876,712 $DYDX. Learn more about the trading rewards program in our documentation or our blog posts.
1,150,685 $DYDX were earned over the course of Epoch 15 and will be distributed to 70 addresses who qualified for LP rewards in Epoch 14. Competition in the pool increased compared to the previous epoch where 53 addresses were eligible. Market makers meeting the 0.25% threshold in Epoch 14 are now eligible to earn rewards in Epoch 15.
73 addresses (59 existing and 14 new) did more than =>0.25% of maker volume in Epoch 15 and are eligible for rewards in Epoch 16. Learn more about the LP Rewards in our documentation or our blog posts.
Liquidity Module: In Epoch 15, the dYdX community voted to effectively wind down the Liquidity Module by setting rewards per second for staking $USDC to 0. $47M $USDC from 518 users was staked to the Liquidity Staking Pool. 128 addresses have withdrawn $44.1M $USDC in Epoch 15.
Safety Module: 37M $DYDX from 4,338 users was staked to the Safety Module. This is consistent from Epoch 14. The dYdX community strongly supported (7.7M DYDX / 93% of the vote) the Snapshot vote created by Xenophonlabs.eth to effectively wind down the safety staking module. Note, implementation of the proposed changes requires an on-chain vote falling under the requirements of the Short Timelock. The top 2 stakers account for over 31% of staked $DYDX.
Community Treasury: Approximately 766,703 $DYDX vested in the Community Treasury and 1,342,466 $DYDX accrued in the Rewards Treasury over the course of Epoch 15. In Epoch 15, the dYdX community voted to reduce trading rewards by 25% (-958,904 DYDX) and to remove rewards for staking $USDC to the Liquidity Module (-383,562 DYDX). Starting in Epoch 15, 1,342,466 $DYDX will accrue in the Rewards Treasury each epoch and can be used by the dYdX community with a governance vote. The dYdX community now has access to 35M $DYDX that has accrued in the Community Treasury and Rewards Treasury. Learn more about the Community Treasury in our documentation.
Circulating Supply: 14.3% 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 15. Learn more about the $DYDX allocation in our documentation.
Epoch 15 has ended. Welcome to Epoch 16! Epoch 16 started automatically on October 25 at 15:00 UTC and will end on November 22 at 15:00 UTC.
The Merkle root was proposed on-chain on October 25 at 22:42 UTC and the 7-day waiting period has begun. Epoch 15 rewards will be claimable here on November 1, at 22:42 UTC (7 days after the end of the epoch plus an 8 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.
Reduction of Trading Rewards by 25%: On September 26, the on-chain DIP to reduce trading rewards by 25% from 3,835,616 $DYDX to 2,876,712 $DYDX was created by Wintermute. The vote passed with 24M $DYDX (99.92%) from 99 addresses voting in support of reducing trading rewards by 25%, as opposed to 19K $DYDX (0.08%) from 15 addresses voting against the change. The change took effect in Epoch 15. The excess $DYDX (958,904 $DYDX per epoch) that accrues in the Rewards Treasury can be used/directed by the dYdX community with a governance vote (Short Timelock).
Winding down the Liquidity Module: On September 21, the on-chain DIP to effectively wind down the liquidity module passed with near unanimous consent from the dYdX community. 26.5M $DYDX from 99 addresses voted in support of effectively winding down the liquidity module. As a result, the rewards associated with $stkUSDC have been set to 0 and the blackout period has been decreased to 3 days. Stakers must request to unstake $USDC at least 3 days before the current epoch ends in order to be able to withdraw their $USDC in the following epoch. If stakers do not request to withdraw, their staked $USDC is rolled over into the next epoch.
A Further Step Towards More Equitable LP Rewards: On September 27, SLN Capital posted an off-chain DIP following up on the Snapshot to revise the LP rewards formula with the follow changes:
///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 formula revision took effect at the start of Epoch 15 (September 27th, at 15:00 UTC).
Winding down the Safety Module: On October 24th, Max Holloway from Xenophon Labs posted a Snapshot to wind down the Safety Staking Module ("SSM"). Xenophon Labs argues that (1) the SSM will not be able to insure the protocol in the case of a shortfall event since it is denominated in $DYDX and (2) the $USDC value of the pool is less than the value of the SSM. The dYdX community voted strongly in support of effectively winding down the Safety Module (7.7M $DYDX (92.95%) from 675 addresses). Note, implementation of the proposed changes requires an on-chain vote falling under the requirements of the Short Timelock.
dYdX Grants Program (“DGP”) Updates: In the third round of funding since the on-chain vote for DGP v1.5 passed, Newly funded grants include:
Delegation: 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 Endorsed Delegates.
On October 22, founder and CEO of dYdX Trading, Antonio Juliano, was interviewed on the Logan Jastremski Podcast, where he shared more on dYdX’s vision of building the best exchange. Watch the interview here.
On October 17, dYdX Trading announced that it has partnered with Banxa to allow users to purchase $USDC directly on dYdX via a variety of payment methods like credit cards or bank transfers. Read more about this fiat on-ramp partnership here.
On October 13, the dYdX Foundation hosted an AMA over Twitter spaces with Max Holloway, founder of Xenophon Labs, to discuss his proposal on winding down the Safety Staking Module (SSM). Listen to a recording of the session here.
On October 12, dYdX Trading hosted Jordi Alexander, CIO at Selini Capital, on the Depth and Spread podcast, discussing game theory, his approach to discretionary vs. systematic trading, and his philosophy on sharing ideas. Listen to the podcast here.
On October 10, the dYdX Foundation announced that Charles d’Haussy joined the team as CEO. He joins the dYdX Foundation from Consensys, where he led APAC growth and BD efforts. Charles looks to leverage his wealth of international business experience to seek strategic partnerships with industry-leading partners, development teams, and stakeholders. He will also harness community-driven growth to develop the dYdX protocol, community, and dYdX DAO. Welcome, Charles! Read more about this announcement here.
On October 6, the Coinbase Wallet Mobile SDK launched and will improve mobile wallet connections on dYdX. This SDK enables developers to build faster, more reliable and more decentralized native mobile web3 dapps. Read more about the launch and the SDK here.
On September 29, the dYdX Foundation hosted an AMA session with Anchorage Lending over Twitter spaces to discuss the nuances of their proposal to lend out $DYDX from the Community Treasury to institutional market makers to generate more liquidity, and drive yield and diversification to the Community Treasury. Listen to the recording of the session here, and read a transcript of the conversation here.
Legitimacy & Disclaimer
dYdX Foundation’s purpose is to support and grow the dYdX protocol ecosystem by enabling communities, developers, and decentralized governance.
Nothing in this post should be used or considered as legal, financial, tax, or any other advice, nor as an instruction or invitation to act by anyone. The dYdX community is sovereign to make decisions freely from time to time, in accordance with the governance rules, principles, and mechanisms adopted by the dYdX DAO. Community discussion and interaction on the contents of this post are encouraged. The dYdX Foundation does not directly participate in governance decisions to be made by the dYdX community, including, without limitation, by making and/or voting on governance proposals. The dYdX Foundation may change, update or complement its analysis or opinions expressed in this post in the future and assumes no obligation to publicly disclose any such change or update. This post is solely based on the information available to the dYdX Foundation at the time it is made and should only be read and taken into consideration at the time it is made and on the basis of the circumstances that surround it.
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