From the other topic. This is disgrace if this is correct about 400$ a month. Ok Polkachu might be a bad example since they are getting the grants for other services but everyone got an idea. there shouldnt be “Love of the Game” situation. This is risk because validators can search for additional stimulus in voting or they are paid behind the back. Its just a simple game theory. There should be transparent staking rewards
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Pay stakers in native DYDX. 100% buybacks increase price of token. Stakers/validators now make more money
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No because what is special about dYdX is that unlike all other PoS networks there is no inflation and instead staking rewards come from real revenue. Once again, 95% of fee revenue should go to stakers as originally planned that all this fee revenue would go to stakers. Buybacks experiments could be better done incentivizing traders from Surge to stake the millions of DYDX instead of instant selling or dYdX entities rather than selling millions in DYDX stake those DYDX and get revenue from staking rewards
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Both of your options brought me to the following:
The most sustainable direction for dYdX is to strengthen the connection between trading activity, token value and network security -without introducing inflation or speculative emissions.
Stakers and validators should continue receiving USDC-denominated rewards, preserving dYdX’s position as a real-revenue, fixed-supply network and ensuring stable validator incentives.
The existing 25 % of protocol fees allocated to DYDX buybacks should remain but evolve into an active alignment mechanism. Instead of passively restaking or holding the repurchased tokens, they should be locked into protocol-controlled incentive pools that reward long-term lockers and stakers. This gradually tightens circulating supply and turns buybacks into a durable source of token demand.
The optimized fee structure:
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70 % of protocol fees → stakers and validators (in USDC)
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25 % → buybacks
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5 % → community treasury
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0 % → Megavault (phased out)
IMPORTANT:
The current trader-reward program (Surge), which distributes liquid DYDX and creates sell pressure, should transition into a stake-to-earn model that aligns traders with the network:
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The more of their rewarded DYDX a trader stakes, the larger their fee discounts and yield multipliers become.
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The longer they remain staked, the more their trading fees gradually decrease, compounding the advantage.
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If they unstake, their fees revert upward faster than they decreased, discouraging short-term exits and continuous selling.
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For the upcoming spot trading module, staked DYDX could also be used to partially compensate slippage, giving stakers a direct trading utility in addition to yield - effectively rewarding loyalty with better execution quality
This stake-to-earn model also aligns with the upcoming “direct staking via UI” functionality which is in the roadmap.
What do you think?
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Great ideas, fully support this structure but the 25% for buybacks should be carefully studied to see if it is bringing any real value to dYdX and if not this should also be directed to stakers
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@staza @Cosmic_Validator What if we wrap this into the following flow:
100% of tokens are bought back from the market, out of which 75% / 80% / 95% / 100% (?) DYDX would be distributed to stakers.
This way, we could create buying pressure on the open market while rewarding stakers with the same tokens they’re already invested in, which increases the chances they won’t sell back into the market, since they’re, lets say, our target audience. So we providing higher APR and create an environment for token growth/trend reversal.
Just thinking out loud — what do you think, maybe the 100% experiment should be tested in this form?
Looks like a fair compromise for all sides : )
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Speaking of stakers and rewards, we shouldn’t overlook the reality of their initial investments.
As I mentioned to the team before — let’s say someone bought $100K worth of DYDX at $2 a year ago. That investment is now worth around $16,000, earning roughly ~$1,300 per year from staking.
Now imagine the same $100K invested at $0.6 just a month ago — that position would now be worth around $50,000, earning about ~$3,000 a year from staking.
No matter which monthly timeframe you look at, there were almost no realistic opportunities to exit in profit, and the APR doesn’t come close to offsetting the loss (even if we would provide 100% allocation of the revenue share) of the principal investment.
This dynamic doesn’t create conditions for consistent inflows into the token. Current stakers won’t stay locked in forever — sooner or later, many will begin to unwind and “realize” their investments.
At the same time, potential investors/ stakers are likely to stay away when they see such a price trajectory.
That’s why at the current token levels, there’s a strong opportunity to create buying pressure — and I believe that a controlled, even if artificial, market intervention through a buyback could help reverse the trend.
It would send a clear signal to existing holders that not all is lost, while also attracting new inflows and engagement from fresh participants
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i support 100% buyback, and reward stakers with fixed APR using community treasury. The buyback has the biggest impact to increasing price of token, and stakers already hold a large amount of coins and benefit the most from price increase
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You mean instead of giving the trading fee revenue to stakers, use this to buy DYDX tokens and then give these tokens to stakers? For what, stakers could then just sell back to USDC, then better just keep the trading fee revenue to stakers.
This is artificial buying pressure. Traders will no there is no real buying pressure, just out of desesperation artificial buying pressure by the dYdX team this is not sustainable. Better traders see all trading fee rewards go to stakers and then they are incentivize to buy and stake DYDX to get this yield
Why not 100% trading fee revenue to stakers and then use some community funds for the buyback experiment? If buybacks are so good to ‘pump’ the token price, why since buybacks were introduced a few months ago the token price dropped by over 50%?
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the community treasury consists of dydx tokens. how do you propose ‘use community funds for buyback’? sell dydx to buy dydx?
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Exactly, that’s what I meant.
On the other hand, for the token price, this approach actually is more beneficial.
From a user experience perspective, receiving USDC as staking rewards and then manually reinvesting it into DYDX is a more complex and less likely user flow. Most people won’t take that extra step — they’ll just keep or spend their USDC elsewhere.
By contrast, paying rewards directly in DYDX lets stakers auto-compound their position and accumulate more DYDX without extra steps, which strengthens holder concentration.
So even though it’s technically artificial buying pressure, it still aligns incentives better:
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Stakers receive DYDX instantly (no extra friction).
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It increases the number of holders who passively accumulate.
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And psychologically, this model strengthens DYDX’s perceived value. A higher APR combined with consistent buybacks — for instance, a 100% buyback with full redistribution to stakers — turns DYDX into a yield-bearing asset people want to accumulate, not trade away.
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The option to receive USDC doesn’t disappear — anyone can still sell DYDX anytime.
We’re simply shifting the focus toward holding and compounding DYDX, making it the centerpiece of the ecosystem unlike USDC rewards, which will mostly leak out of the ecosystem, spent or reinvested elsewhere
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I’m just a UX/UI designer, not Isaac Newton, so I might be wrong here but:
100% buyback → 100% redistribution to stakers
$20M / $0.3 = ~66.7M tokens bought back yearly.
Distributed among 240M staked = ~27.8% APR.
Wouldn’t that have a positive impact on the price/for stakers/product security, even if the approach is somewhat “artificial”?
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Good day @charles . What’s your opinion on this?
you can’t use community funds for buyback because the community treasury is holding dydx tokens. How are you going to use it? Sell dydx to buy dydx?
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I also support this one to create immediate buy pressure and significantly reduce circulation supply, but conducted within limited period - 3 months and with the following fees structure:
- Buybacks - 80%
- Staking - 15%, also we will reward stakers with fixed APR using community treasury to mitigate temporary pressure
- Community Treasury - 5%
- Megavault - 0%
- All remaining unlocks must be postponed
- Surge - must be stopped in a way it is conducted at this moment. The stake-to-earn initiative like I described must be started instead:
After 3 months:
- we analyse the results and vote on the fees structure which fits the needs of protocol
- the result of the 3 months trial will also show us the impact of buybacks on token price
- apparently new fees structure must be implemented like that:
But we need to have such a financial report to understand the spendings
I’m planning to submit this version of a DRC for voting on Monday 03.11
Why the rush?
We need to wait first for the financial report and input from the different dYdX entities.
This structure makes more sense but if you rush the below structure we will vote against:
My bad, made a typo. I wanted to say 07.11
But why do you against 3 months of trial which includes means to support validators for that period?