The dYdX community recently voted to stake 20 million dYdX tokens using Stride’s staking service for Cosmos blockchains. dYdX is a decentralized exchange platform that allows users to trade perpetual futures contracts. In its most recent version, dYdX v4, it launched its own independent blockchain called dYdX chain built on the Cosmos blockchain. The dYdX DAO oversees the governance of this blockchain, allowing dYdX holders to participate in protocol decisions and upgrades. The recent move to stake tokens aims to boost the economic security of the network and encourage stake diversity in the community.
The tokens staked in the liquidity pool will earn USDC rewards, which will be automatically compounded into more dYdX tokens, benefiting the treasury. With the current network architecture, a staker with one third of the voting power can halt operations, while two thirds can misallocate funds. By increasing the number of stakeholders and evening the voting power of validators, the proposal reinforces dYdX’s mission of decentralization and community-driven trading. Stride’s liquid staking service can enhance the protocol’s resilience to network outages and voting power concentration.
Some users have expressed skepticism about the proposal, fearing that transferring the treasury to a liquid staking service could result in a lower Annual Percentage Rate (APR) for staking users. This may make the token less appealing to new investors and impact the token’s value for long-term growth. However, Stride has offered to charge fees of only 7.5%, a discount from its usual 10% fees, to mitigate the impact on APR. The proposal was welcomed by Stride, as it will boost the economic security of the dYdX chain and improve stake decentralization.
With an overwhelming 91% support from the dYdX community and an 81% participation rate in the vote, the proposal to stake 20 million dYdX tokens with Stride has passed successfully. This move is seen as crucial for enhancing the economic security of the dYdX chain and ensuring stake diversity within the community. By utilizing Stride’s staking service, the dYdX DAO can continue to make protocol decisions and upgrades in a community-driven manner. The partnership with Stride aims to strengthen the resilience of the protocol and increase the token’s value for long-term growth in the decentralized trading ecosystem.
