Source: Cointelegraph Original: "{title}"
Decentralized finance (DeFi) trading platform dYdX announced the launch of its first token buyback program on March 24, aimed at enhancing security and governance by reinvesting in its ecosystem.
According to the announcement, 25% of the protocol's net fees will be used to buy back its native token dYdX (DYDX) on the open market each month.
Following the announcement, the DYDX token surged over 10%, trading at approximately $0.731 according to CoinGecko at the time of writing. Over the past two weeks, the token has risen more than 21%.
DYDX soared due to the buyback news. Source: CoinGecko
New dYdX Distribution Model
Previously, dYdX allocated 100% of platform revenue to ecosystem participants. Under the new distribution model, 25% will be used for token buybacks, another 25% will fund its USDC liquidity provision program MegaVault, 10% will go to its treasury, and the remaining 40% will continue to be distributed as staking rewards.
dYdX noted that the current 25% allocation for token buybacks may increase, with the potential to rise to as high as 100% over time as community discussions progress.
According to DefiLlama, the platform's current total value locked (TVL) is $279 million. In February, dYdX generated $1.29 million in revenue from fee income, with $1.09 million in revenue so far in March.
The 25% share of revenue allocated to token buybacks has been declining. Source: DefiLlama
The DeFi industry often benchmarks against the "DeFi Summer" of 2020, characterized by rapid user growth driven by yield farming and decentralized applications.
In a recent interview with Cointelegraph, dYdX Foundation CEO Charles d’Haussy predicted that the next major DeFi boom will occur after the summer, potentially starting as early as September and lasting "for months."
dYdX primarily emerged as a decentralized platform in mid-2020, offering spot trading, lending, borrowing, and margin trading. Its popularity surged in 2021, especially after the launch of its Layer-2 perpetual futures exchange and the native DYDX token.
In its 2024 ecosystem report, dYdX anticipates that by 2025, the decentralized derivatives market will expand to $34.8 trillion, a significant increase compared to the $15 trillion in derivatives trading handled by decentralized exchanges (DEX) in 2024.
Related: Mt. Gox's third major Bitcoin transfer operation this month, amounting to $1 billion
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