[DRC] Proposal for dYdX Protocol Upgrade to v9.9

dYdX Chain
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dYdX Protocol Upgrade v9_9
dYdX Protocol Upgrade v9_91920×960 106 KB

TL;DR: (summary)

We would like to submit for consideration a software upgrade proposal for the dYdX Protocol v9.9. This version introduces Canonical USDC, which moves the backing of USDC on dYdX Chain from Noble USDC to Injective USDC, following Circle’s deprecation of USDC on Noble.

Introduction:

Hello dYdX Community,

We’re bringing to your attention the dYdX Protocol release v9.9, which adds the x/canonicalusdc module so that USDC on dYdX Chain keeps its denom and balances while its backing shifts gradually from Noble USDC to Injective USDC, as outlined in the dYdX Foundation’s Noble USDC deprecation post. Once the migration starts, USDC deposits come in only through Injective, while USDC withdrawals go out through Noble or Injective. This will clear the Noble backing gradually before withdrawals to Noble are turned off (subject to governance approval).

Note: the adoption of v9.9 is subject to software upgrade via a governance proposal.

Specification:

Detailed information on v9.9 can be found in the release notes. Key updates include:

  • New x/canonicalusdc module - Records whether each unit of USDC on dYdX Chain is backed by Noble USDC or Injective USDC, while trading, subaccounts, balances and fees keep using the existing USDC denom (ibc/8E27BA2D5493AF5636760E354E46004562C46AB7EC0CC4C1CA14E9E20E2545B5).
  • Deposits through Injective - Injective USDC deposits are credited 1:1 as USDC on dYdX Chain; deposits from Noble, including CCTP transfers routed through Noble and Noble auto-forwarding addresses, are rejected and refunded on Noble.
  • Withdrawals as Noble or Injective USDC - USDC leaves dYdX Chain as Noble or Injective USDC, and is returned to the sender if the transfer fails or times out; withdrawals of USDC to other chains are no longer supported.
  • Gradual retirement of Noble backing - Withdrawals to Noble stay open only while the remaining Noble backing is cleared, and governance can turn them off only once no Noble backing remains.
  • Transfer limits - A per-transfer cap, an overall cap on migrated USDC and a cap on pending withdrawals, with both routes drawing from the existing USDC rate limit.
  • Backing safeguard - If USDC on dYdX Chain is not fully backed, Canonical USDC deposits and withdrawals pause automatically while trading continues.

Next Steps:

Feedback is welcome on this DRC. The dYdX Operations subDAO suggests the following timeline for proceeding with the governance proposal:

  • Proposal Submission: Nov 13, 2026
  • Expected Vote Outcome: Nov 16, 2026
  • Upgrade Date: Nov 17, 2026
  • Suggested Block Height: 114220000

NOTE: We advise that the potential proposer revise the suggested block height at the time of proposing and pick an upgrade height close to 5:00 PM (UTC) on Nov 17, 2026 - especially in case the ETA of 114220000 has shifted dramatically.

NOTE: Please make sure to include the required info-fields in the proposal.

NOTE: The protocol software has dropped patch number from upgrade name, therefore mandating the use of v9.9 in the proposal JSON.

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Thank you for your continued participation and support in the governance and improvement of the dYdX Chain.

dYdX Operations SubDAO