[DRC] Surge 2.0: Fee Holiday + Active Trader Growth Program
Summary
This DRC proposes a Surge 2.0 framework for dYdX Labs to review, refine, and potentially implement as the next iteration of the dYdX incentive program following the conclusion of the recent CLC-managed Surge renewal.
Surge 2.0 proposes to combine targeted fee holidays on strategic markets with a broader Active Trader Growth Program that rewards genuine trading activity, sustained open interest, active days, retention, frontend usage, and market diversification.
The goal is to rebuild Surge into a more effective growth program for the entire dYdX ecosystem, while preserving the strongest part of the recent renewal: targeted fee holidays.
Abstract
The recent CLC-managed Surge renewal helped maintain activity through selected fee holidays, particularly on BTC. However, the broader incentive structure became increasingly narrow, with later seasons focusing more on liquidation rebates, isolated trading competitions, and limited reward opportunities for general active traders.
Surge 2.0 aims to improve this structure by introducing a three-month pilot program with the following components:
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Strategic Fee Holiday Layer.
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Active Trader Points Pool.
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Market Expansion Incentives.
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Frontend and Channel Growth Incentives.
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Monthly reporting and community review.
This DRC proposes that dYdX Labs implement and operate the program, given its role in product growth, frontend distribution, trader acquisition, and the broader dYdX roadmap.
Motivation / Rationale
Fee holidays have proven to be one of the most useful parts of recent dYdX incentives. They reduce trading friction, help dYdX compete with low-fee and zero-fee perpetual venues, and can attract routing flow to strategic markets.
However, fee holidays alone are not enough. A complete incentive program should also reward behaviors that create long-term ecosystem value, including sustained open interest, consistent participation, frontend usage, retention, and market diversification.
The recent CLC-managed renewal had several weaknesses:
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The program became too narrow.
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Liquidation rebates became too central to the incentive structure.
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PnL competitions rewarded only a small number of winners.
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Broad active traders had fewer clear reasons to participate.
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The program did not provide enough transparent reporting on retention, open interest growth, volume quality, or cost per retained trader.
Surge 2.0 is designed to address these issues by combining targeted fee holidays with a broader points-based active trader program.
Specification
Program Duration
Surge 2.0 should run as a three-month pilot.
Each month should be treated as a separate season with its own reporting and distribution process.
Suggested structure:
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Month 1: Surge 2.0 Season 1
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Month 2: Surge 2.0 Season 2
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Month 3: Surge 2.0 Season 3
At the end of the pilot, dYdX Labs should publish a full performance review and the community can decide whether to renew, modify, or end the program.
Proposed Budget
Base proposal:
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$1,000,000 per month
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$3,000,000 total pilot budget
Conservative alternative:
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$500,000 monthly base pool
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Up to $500,000 monthly performance unlock
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Performance unlock based on volume quality, active trader growth, open interest, frontend participation, and retention
The purpose of the budget is to create a measurable growth program, not simply to increase emissions.
Component 1: Strategic Fee Holiday Layer
dYdX should continue targeted fee holidays on strategic markets.
BTC should remain the primary anchor market because it is one of the most important gateway markets for perpetual traders and is essential for routing flow, market share, and exchange competitiveness.
Governance may also approve fee holidays for additional strategic markets, such as:
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ETH
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SOL
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Selected RWA markets
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Newly launched markets
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Partner-supported markets
Fee holidays should be evaluated based on:
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Genuine trading volume.
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Open interest.
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New active traders.
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Returning active traders.
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Retention after the fee holiday.
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Market share impact.
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Evidence of suspicious or abusive activity.
Fee holidays should not be judged only by gross volume.
Component 2: Active Trader Points Pool
Surge 2.0 should introduce a monthly Active Trader Points Pool.
Suggested scoring model:
User Points =
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35% Volume Score
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25% Open Interest / Holding Time Score
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20% Active Days & Retention Score
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10% Frontend / Channel Growth Score
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10% Market Diversification Score
The goal is to reward useful activity, not only raw volume.
Volume Score — 35%
Volume should remain an important part of the program because it contributes to trading activity and exchange competitiveness.
Eligible volume should come from genuine active traders and should exclude:
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Wash trading.
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Self-trading.
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Market makers.
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Professional market-making entities.
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Institutional entities.
Open Interest / Holding Time Score — 25%
The program should reward traders who contribute sustained open interest, not only rapid volume turnover.
A simple scoring concept:
Position-Time Score = Position Notional × Holding Duration
This rewards traders who keep meaningful positions open over time and contribute to sustained market activity.
Reasonable anti-abuse filters should be applied to prevent artificial position cycling, self-trading, or wash activity.
Active Days & Retention Score — 20%
Surge should reward traders who return consistently.
Suggested retention structure:
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Active in one month: 1.00x
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Active in two consecutive months: 1.10x
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Active in three consecutive months: 1.20x
This encourages traders to stay active throughout the program instead of farming only one short campaign.
Frontend / Channel Growth Score — 10%
dYdX should reward usage across strategic access points, including:
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Web
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Mobile
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Telegram
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Partner frontends
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Approved ecosystem integrations
This supports dYdX’s distribution strategy and helps grow real user activity beyond purely backend or professional flow.
Frontend incentives should include anti-automation checks to ensure they reward genuine usage.
Market Diversification Score — 10%
A portion of rewards should support trading in selected strategic markets beyond BTC.
This can include:
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ETH
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SOL
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BONK
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RWA markets
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Newly launched markets
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Markets aligned with partner frontends
This prevents dYdX from becoming too dependent on one market while still keeping BTC as the anchor.
Eligibility
Eligible participants:
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Individual active traders
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UI traders
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Mobile traders
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Telegram traders
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API traders
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Returning dYdX traders
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New traders who meet minimum activity requirements
Excluded participants:
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Market makers
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Professional market-making entities
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Institutional entities
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Wash trading accounts
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Self-trading accounts
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Sybil clusters
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Accounts using abusive automation to simulate fake activity
Implementation
This DRC proposes that dYdX Labs implement and operate Surge 2.0.
dYdX Labs is well positioned to execute the program because Surge 2.0 is not only a rewards program. It is also a product growth initiative connected to:
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dYdX frontend growth.
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Mobile adoption.
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Telegram trading.
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Partner frontend distribution.
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New market launches.
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User retention.
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Market share strategy.
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Exchange competitiveness.
dYdX Labs should publish monthly reward calculations and provide detailed reporting for community review before each distribution.
Reporting Requirements
At the end of each monthly season, dYdX Labs should publish a detailed report including:
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Total trading volume.
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Estimated genuine volume after suspicious activity filters.
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Open interest growth.
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Number of eligible traders.
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Number of new traders.
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Number of returning traders.
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Active days per trader cohort.
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Rewards distributed.
The program should only be renewed if the data shows that it improves the ecosystem.
Impact Assessment
Technical Impact
The program should not require a core protocol upgrade if implemented through off-chain reward calculations and governance-approved distributions.
The main technical requirement is reliable data analysis for volume, open interest, active days, frontend attribution, suspicious activity filtering, and reward calculations.
Economic Impact
The proposed program would require up to $3,000,000 in DYDX-equivalent incentives over three months.
The expected benefit is stronger trader retention, higher quality volume, increased open interest, better frontend adoption, and improved competitiveness against other perpetual venues.
Social / Governance Impact
The program gives the community a clearer structure for evaluating incentives.
Monthly reporting and a three-month pilot structure allow the DAO to adjust or discontinue the program if the results are not strong enough.
Next Steps
This DRC is intended to collect community feedback.
Suggested process:
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Forum discussion and feedback period.
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Revision of the proposal based on community comments.
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Community temperature check.
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Formal governance proposal if there is sufficient support.
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Monthly distribution proposals during the pilot.
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Full review after the three-month pilot.
Community Poll
Should dYdX move forward with a Surge 2.0 pilot implemented by dYdX Labs?
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Yes, I support this proposal.
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No, I do not support this proposal.
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Abstain / Need more information.
Conclusion
dYdX should not simply continue the same incentive structure from the recent CLC-managed renewal.
The next Surge program should be broader, more measurable, and more useful to the entire ecosystem.
Surge 2.0 combines the strongest part of the recent renewal — targeted fee holidays — with a broader Active Trader Growth Program that rewards genuine volume, sustained open interest, active days, retention, frontend usage, and market diversification.
This proposal requests community feedback and support for dYdX Labs to implement Surge 2.0 as a three-month pilot.