dYdX, an Ethereum DEX, will unlock 115% of its current token supply on February 3, 2023. This event could impact the future of the platform. In this journal, we will explore the upcoming dYdX token unlock and its potential implications.
- dYdX was once a successful Ethereum DEX, but has declined with the crypto market.
- dYdX is now building its own blockchain on Cosmos for decentralization.
- The token unlock may result in a mix of selling and buying pressure, indicating differing opinions on its future growth.
On February 3, 2023, 150 million $DYDX tokens, equivalent to approximately 115% of the current circulating supply, will be unlocked, according to CoinGecko. This event is significant and could have significant implications for the future of the dYdX platform.
Overview of dYdX
dYdX was once the top-ranked derivatives DEX on the Ethereum blockchain, leveraging ZK Rollup, a layer-2 scaling solution provided by StarkEx and developed by StarkWare, for faster and cheaper transactions. At its peak, the platform had a daily trading volume of up to $8 billion and a maximum TVL of $1.1 billion. However, the recent downturn in the cryptocurrency market has led to a decrease in user activity and a corresponding decrease in trading volume and TVL, which currently stands at $368 million. Despite this, dYdX still generates the highest revenue among derivatives platforms, with revenue of $272.9 million in the last 365 days.
In addition to its presence on the Ethereum network, dYdX is working on growing its own blockchain on Cosmos, which was launched in late 2022.
dYdX's V4 blockchain on the Cosmos SDK is currently in stage 2, an internal testnet, as part of its roadmap towards decentralization and independence from any central institution, including dYdX Trading Inc. The next stages include a private testnet in Q4 2022 and a public testnet in Q1 2023.
With the advent of the V4 blockchain, dYdX will no longer earn revenue from transaction fees. This means that the team may need to consider holding more tokens to maintain their revenue. The new platform could also lead to more use cases for $DYDX as a native token, but it will also require significant work in late 2022 and early 2023, ahead of the next vesting.
The unlocking of 150 million $DYDX tokens will take place on February 3, 2023. Of these tokens, 66 million will be returned to the development team and 83 million will be returned to investors and funds. There may be less selling pressure, as the development team is expected to hold on to the tokens for the upcoming V4 blockchain.
On-chain Data Analysis
From the Backers
dYdX is backed by prominent firms such as A16z, Polychain, Delphi, Paradigm, Three Arrows Capital, CMS, Wintermute, and others. Despite having received their $DYDX tokens one year ago, these backer-identified wallets have not shown signs of dumping. For example, Wintermute holds 4 million $DYDX, CMS Holdings holds 1.7 million, and HashKey Capital holds 2.2 million. In addition, a wallet (0x92d6) that bought into the private sale and took profits at the peak is now accumulating $DYDX, which could indicate continued faith in the long-term growth potential of dYdX.
There may still be selling pressure from individuals who receive rewards in the coming months. For example, wallet 0xa615 received approximately 3.5 million $DYDX, which was deposited on Binance and sold. This deposit led to a quick reaction from the market, causing a 2% increase in price the day after.
The unlocking of 150 million $DYDX tokens is a significant event that could impact the future of the dYdX platform. The dYdX team may need to consider holding more tokens to maintain their revenue after the launch of its V4 blockchain, which will no longer earn revenue from transaction fees. On-chain data analysis shows a mix of selling pressure from individuals and accumulation from prominent backers, indicating a range of opinions on the long-term growth potential of dYdX.
dYdX is a Defi platform built on the Ethereum blockchain that provides a marketplace for derivatives trading. It uses ZK Rollup technology to provide faster and cheaper transactions and was once the top-ranked derivatives DEX, with a daily trading volume of up to $8 billion.