Overview
Chaos Labs is pleased to provide a comprehensive review of the tenth trading season on the dYdX Chain. This analysis encompasses all facets of exchange performance, emphasizing the impact of the Launch Incentive Program.
We are diligently fine-tuning the incentives, ensuring they effectively meet their intended goals. By monitoring a broad spectrum of indicators, we aim to understand the rewards program’s dynamics and outcomes.
Key Stats:
- dYdX Chain has seen over 9.2bn in trading volume across 200 live markets.
- Over 5600 traders were active through season 10.
- Over $135m of open interest, down 29% from the beginning of the season.
- The dYdX Chain has approximately $216m USDC in TVL deposited on the exchange at the end of season 10, down 23% from the beginning of the season.
- While BTC, ETH, and SOL saw modest liquidity gains of 13–19%, overall liquidity across all markets within 100 bps decreased by 10% from $143m to $130m.
dYdX Chain Trading
The dYdX Chain has seen over $9.2bn in trading volume across 200 live markets. This is an increase of 7% compared to the preceding 30-day period.
Open interest has decreased over the season from $190m to $135m, a decrease of 29%.
This aligns with historical patterns where open interest tends to fluctuate significantly in response to broader market stress, and it suggests that traders remained cautious throughout the season following February’s volatility.
Traders have paid almost $50.3m in fees to stakers securing the dYdX Chain since inception. $1.8m of this came in season 10 of the launch incentive program.
dYdX Chain Liquidity
After successfully building deep liquidity across all markets in the previous 3 seasons, the focus shifted back towards takers in season 10. Despite this, liquidity retained well.
Among the major markets (BTC, ETH, SOL), liquidity continued to rise modestly (up 13–19%), while DOGE‑USD saw a smaller 4% gain. Notably, several other markets - including ADA, PEPE, SUI, and LTC - saw liquidity contract.
See the table below for liquidity trends in some major markets sorted by traded volume.
| Market | Current | Preceding 30 day | Change |
|---|---|---|---|
| BTC-USD | $37,843,978 | $33,014,880 | 13% |
| ETH-USD | $34,492,626 | $28,770,971 | 17% |
| SOL-USD | $14,339,468 | $11,610,806 | 19% |
| DOGE-USD | $5,228,471 | $4,996,342 | 4% |
| XRP-USD | $3,967,335 | $4,796,905 | -21% |
| ADA-USD | $2,604,240 | $4,210,805 | -62% |
| PEPE-USD | $1,821,055 | $2,788,375 | -53% |
| SUI-USD | $357,579 | $547,964 | -53% |
| LTC-USD | $224,399 | $397,082 | -77% |
Interestingly, although the number of markets with over $1M in liquidity stayed at 14, mid-tier thresholds (such as above $500k or $250k) dropped significantly. Yet the “above $10k” tier actually grew from 144 to 170, suggesting more granular orders even as overall orderbook liquidity declined from $143m to $130m. This divergence underscores a shift toward deeper liquidity in top markets and thinner books in many mid- and lower-volume pairs.
| Orderbook Liquidity | Above $1000k | Above $500k | Above $250k | Above $100k | Above $50k | Above $10k | Total Liquidity ($m) |
|---|---|---|---|---|---|---|---|
| 30 days ago | 14 | 16 | 52 | 71 | 112 | 144 | 143 |
| Now | 14 | 14 | 25 | 55 | 76 | 170 | 130 |
Funding
During Season 10, average funding rates remained mixed across major markets: BTC and ETH held positive territory, while altcoins like SOL, XRP, and DOGE posted negative averages, reflecting ongoing caution and uneven sentiment across the board.
| Market | Average | Median | Max | Min |
|---|---|---|---|---|
| BTC | 4.28% | 4.00% | 40.84% | -53.76% |
| ETH | 3.78% | 2.68% | 30.22% | -19.93% |
| SOL | -2.32% | 0.00% | 35.37% | -37.45% |
| XRP | -2.99% | 0.00% | 54.75% | -91.43% |
| ADA | -0.54% | 0.00% | 22.01% | -21.02% |
| DOGE | -1.34% | -0.22% | 17.74% | -19.38% |
| SUI | -2.02% | 0.00% | 6.35% | -121.87% |
| LTC | 2.05% | 0.00% | 187.14% | -36.79% |
| PEPE | -4.93% | -0.22% | 0.00% | -58.80% |
| TON | -0.06% | 0.00% | 1.09% | -5.37% |
Liquidations
During Season 10, liquidations remained on par with the previous period, totaling $31 million across all markets.
The insurance fund now sits at over $13.4m, bootstrapped predominantly by protocol liquidation fees. Over $0.6m of this came over season 10.
TVL and Deposit Metrics
At the end of Season 10 approximately $216m USDC was deposited in the app on the dYdX Chain, down 24% from $280m USDC at the start of the season.
Program Efficiency Metrics
Much of the above analysis focuses on aggregate metrics, which can be influenced by a small number of traders. Our analysis of the program also encompasses a bottom-up assessment of the impact it has in growing the number of active traders.
This section provides a deep dive into trader-level metrics to highlight the program’s impact across a range of dimensions. This, in turn, forms the basis for the long-term projections around the program’s impact and efficiency.
Daily and Weekly Active Traders
Weekly active traders continued to fluctuate this season, peaking in early December before trending down to 2809 by mid‑March. Average daily actives followed a similar path, rising until mid‑December and then gradually declining into March. Notably, volatility spiked in late February and early March - reaching as high as 69.09% - which coincided with short‑term increases in trading activity but did not prevent overall participation from tapering off toward the end of the period.
Growing the number of average daily and weekly active traders on dYdX is a guiding principle of the Launch Incentive Program, and significant care is taken to ensure that the incentives appeal to a diverse segment of traders.
| Week | Average Daily Active | Weekly Active | Average Weekly Volatility |
|---|---|---|---|
| 2024-10-28 | 1646 | 2581 | 33.10% |
| 2024-11-04 | 1958 | 3475 | 42.58% |
| 2024-11-11 | 2277 | 4225 | 57.39% |
| 2024-11-18 | 2365 | 4176 | 40.48% |
| 2024-11-25 | 2287 | 4435 | 35.36% |
| 2024-12-02 | 2555 | 4527 | 42.76% |
| 2024-12-09 | 2310 | 4657 | 39.27% |
| 2024-12-16 | 2328 | 4320 | 50.31% |
| 2024-12-23 | 1431 | 3817 | 36.32% |
| 2024-12-30 | 1648 | 3306 | 30.78% |
| 2025-01-06 | 2014 | 3789 | 37.27% |
| 2025-01-13 | 2265 | 3949 | 49.38% |
| 2025-01-20 | 2028 | 4035 | 55.07% |
| 2025-01-27 | 2227 | 3866 | 42.38% |
| 2025-02-03 | 1959 | 4533 | 46.12% |
| 2025-02-10 | 1757 | 2948 | 31.71% |
| 2025-02-17 | 1850 | 3009 | 25.78% |
| 2025-02-24 | 2135 | 3617 | 61.95% |
| 2025-03-03 | 1971 | 3538 | 69.09% |
| 2025-03-10 | 1916 | 3403 | 47.53% |
| 2025-03-17 | 1618 | 2809 | 29.07% |
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Weekly active traders are defined as traders who make at least one trade during a week.
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Volatility is measured as the variance of minute-by-minute log returns of BTC. This short time frame accurately measures the volatility experienced by dYdX Chain traders in its largest market better than the traditional daily volatility.
Trader Engagement
Trader engagement is defined as how frequently the active user interacts with the dYdX Chain. This is analyzed across a few dimensions. The ratio of average daily active users to weekly active users broadly signals what portion of weekly active traders make a trade on a given day in the week. When this ratio is high, more traders find value in the product and return for this utility.
From a Launch Incentive Program perspective, the incentives should appeal to traders who are likely to become more regular traders and, therefore, likely to be stickier over the long term.
Another measure analyzed is the number of days traders have been active during season 10. We observe an increase in the cohort of traders who are active on almost a daily basis.
Weekly Trader Breakdown and Retention
Weekly active traders in season 10 were broadly in line with season 9.
The weekly trader retention rate has stayed relatively stable between 60% and 70% across seasons 7-10..
The marginal weekly trader retention rate shows how likely it is for a trader who has traded for a certain number of weeks to trade for one more. This is a slightly different methodology from the retention rate above, as returning traders are treated the same as retained traders here, hence the higher retention numbers.
What is apparent is how much better traders retain the more weeks they have been active. The goal is to get a trader active for at least six weeks, as the data suggests traders are incredibly sticky.
Marginal Weekly Trader Retention Rate
| Week | Retention Rate |
|---|---|
| 1 | 57.78% |
| 2 | 76.50% |
| 3 | 85.89% |
| 4 | 88.30% |
| 5 | 91.16% |
| 6 | 89.91% |
| 7 | 94.83% |
| 8 | 92.19% |
| 9 | 93.19% |
| 10 | 94.50% |
Summary
There are many aspects contributing to the growth in the dYdX Chain since the Launch Incentive Program began. Attributing growth to specific factors is not an exact science, and we acknowledge the impact market conditions have on trading activity. Given that, here are some highlights from our analysis:
- Traders spent $1.8m in fees during season 10, and the program will pay out $1.5m in rewards.
- While BTC, ETH, and SOL saw modest liquidity gains of 13–19%, overall liquidity across all markets within 100 bps decreased by 10% from $143m to $130m.
- Over 5,600 traders used the dYdX Chain during Season 10 - a decline of roughly 10% compared to Season 9 - indicating a slight pullback in overall participation.
- Weekly active traders fell from 3,617 to 2,809 over the four‑week period, aligning with a drop in retention rates toward the end of Season 10.
Disclaimer
This report is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services by Chaos Labs. No reference to any specific security constitutes a recommendation to buy, sell, or hold that security or any additional security. Nothing in this report shall be considered a solicitation or offer to buy or sell any security, future, option, or other financial instrument or offer or provide investment advice or service to any person in any jurisdiction. Nothing contained in this report constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed in this report should not be taken as advice to buy, sell, or hold any security. The information in this report should not be relied upon for investing. In preparing the information in this report, we have not considered any particular investor’s investment needs, objectives, and financial circumstances. This information has no regard for the specific investment objectives, financial situation, and particular needs of any specific recipient of this information, and the investments discussed may not be suitable for all investors. Any views expressed in this report were prepared based on the data available when such views were written. Changed or additional information could cause such views to change. All information is subject to possible correction. Information may quickly become unreliable, including market or economic changes.
Throughout the program, Chaos Labs’ role is confined to providing recommendations regarding the allocation of rewards. The actual implementation and distribution of said rewards are subject to the formal approval process of the dYdX Chain governance votes. Any actions pertaining to reward distribution shall only be executed following affirmative governance votes within the dYdX Chain framework.