kpk is pleased to present the dYdX Treasury SubDAO’s January Community Update, which outlines recent developments, market conditions, DYDX metrics, and programme execution.
This update is accompanied by kpk’s January Treasury Report, which provides a detailed review of treasury performance and strategy.
Market Update
In January, the crypto market extended its downward trend, characterised by thinner liquidity conditions, declining participation from marginal buyers, and a clear shift toward capital preservation. Trading volumes remained subdued across both spot and derivatives markets, while funding rates and open interest reflected a more cautious positioning environment.
Market Performance
Continuing its Q4 2025 downward trajectory, BTC began the year weakly, with strong volatility at the end of January. Over the month, it declined by an additional ~11%, closing January around $78k, compared with $87-88k at the end of December. This marks a cumulative ~37% peak-to-trough drawdown since early October.
ETH underperformed BTC, falling roughly 20% and ending the month around $2.3-2.4k.
Institutional Flows
ETF flows were mixed throughout January. Early in the month, there were signs of re-engagement from institutional allocators, suggesting selective redeployment of capital following the Q4 risk-off period. However, late-month sessions recorded notable net outflows, indicating that positioning was not consistently supportive.
The overall pattern reflects tactical allocation adjustments rather than strong directional conviction. ETF activity acted as a variable influence on market structure during the month, at times supportive but not sustained enough to materially alter broader market momentum.
Market Structure & Dominance
Bitcoin dominance remained elevated near ~59% during January, indicating continued capital concentration in BTC rather than broad rotation into higher-beta ecosystems. The dominance profile suggests the market remained structurally defensive, with limited breadth expansion across altcoins and infrastructure tokens.
This contrasts with expansionary phases where dominance compresses meaningfully alongside broad-based risk participation. January instead reflected stabilization within a BTC-led structure.
Funding & Derivatives
Open interest across major venues increased during January, reflecting a gradual rebuild in derivatives participation following the Q4 deleveraging phase. The expansion was orderly rather than aggressive, and remained below prior cycle extremes.
A significant year-end options expiry reduced aggregate options open interest materially, effectively clearing legacy positioning and improving the signal quality of new risk expression entering 2026. This reset helped reduce structural crowding at the start of the month.
Funding rates across major centralized exchanges remained generally neutral to mildly positive throughout January. BTC funding oscillated around neutral levels with modest positive bias, while ETH funding displayed similar behaviour without sustained extreme prints. There were no prolonged negative funding regimes or cascade-style flips observed during the month.
On-chain perpetual markets showed variability in funding levels but did not exhibit structural stress conditions. Overall, derivatives positioning during January is best characterised as a measured leverage rebuild rather than leverage excess.
DYDX Token Update
DYDX had a strong but volatile first half of January. It surged early in the month, peaking around mid-January with gains of roughly +25–30% from the start, clearly outperforming majors like BTC and ETH during that stretch. Momentum then faded in the second half, with a sharp pullback and a weak month-end close below the starting level.
Trading activity on the DYDX perpetual markets remained concentrated in the BTC-USD and ETH-USD pairs, with SOL-USD emerging. BTC-USD continued to be the dominant market with a 69% market share and generated approximately $6.65B in notional volume across 1.8M trades. Both notional volume and number of trades remained stable compared to December 2025. SOL-USD followed with approximately $1.5B in notional volume and 584k trades, surpassing ETH-USD. ETH-USD ranked third, recording approximately $1.19B in notional volume across 524k trades, down from approximately $1.69B in the previous month.
Buyback Programme — January Update
In the month of January, open-market activity acquired 889,869 DYDX tokens at an average price of $0.17525, executed across 3,147 orders, for a total outlay of $155,948.
There were no OTC transactions for the month.
Staking Programme
No major delegation adjustments were made, and the structure remained in line with the periodic review #4 performed in November.
Asset Allocation
The portfolio currently consists of:
- 81.71M DYDX (92.9%)
- 898k USDC (7.10%)
Yield Generation
- Staking Programme: 5k USDC generated by the Staking Programme – The lower value is a result of the new rewards distribution from proposal #313 (a reduction from 40% to 15%).
- MegaVault: Following a proposal to remove the MegaVault Operator and set existing vaults to close-only, the Treasury SubDAO fully unwound its MegaVault LP positions. Given the performance profile observed over recent months, combined with the reduction in protocol fee generation, the decision was made to withdraw 100% of the allocated capital.
As noted in prior reports, $300K USDC had been deployed to MegaVault on February 13 as a strategic yield source. The position initially generated approximately 10% APY prior to the October 10 price regime shift. However, performance declined materially following the change in market structure, stabilising near ~1.68% APY as of December 2025. - Osmosis DYDX/USDC Liquidity: LP positions on Osmosis were fully closed during the period, concluding the USDC/DYDX liquidity provision strategy initiated in Q4. Liquidity was withdrawn from pool #3152 USDC/DYDX across two active positions.
- Position 1 (including rewards) resulted in the withdrawal of 200.26k DYDX and 252.89 USDC.
- Position 2 (including rewards) resulted in the withdrawal of 132.71k DYDX and 100.81 USDC.
In total, the closure of both positions, plus past liquidity adjustments, resulted in 857.57k DYDX and 353.7 USDC being removed (inclusive of accrued rewards).
Both actions reflect a broader reassessment of DeFi yield strategies under the current market regime, prioritising capital preservation, liquidity flexibility, and improved risk-adjusted deployment opportunities.
Token Allocation %
An updated inventory of the addresses controlled by the Treasury SubDAO follows:
Other Updates
The DYDX delegation rebalancing is due in February. Expect a separate communication on the matter.