KPK is pleased to present the dYdX Treasury SubDAO’s May Community Update, which outlines recent developments, market conditions, DYDX metrics, and programme execution.
This update is accompanied by KPK’s May Treasury Report, which provides a detailed review of treasury performance and strategy.
Market Update
May 2026 was a reset month for crypto markets. Prices drifted lower through the period as spot ETF demand reversed, leverage unwound and a weaker macro backdrop kept risk appetite subdued. The decline stayed orderly for most of the month before accelerating into the final week.
Market Performance
BTC traded lower throughout May, opening at approximately $77,384 and closing at approximately $73,628, down approximately 4.9% month on month. It reached a monthly high near $81,330 on 6 May before grinding down to a monthly low of approximately $73,227 on 28 May. The repricing reflected reversing spot ETF flows, reduced marginal buying and a persistent short bias in derivatives.
ETH underperformed BTC over the course of the month, opening at approximately $2,290 and closing at approximately $2,017, down approximately 11.9% month on month. The sharpest leg came late in the month. An earlier bout of long liquidations over 11-13 May had already left positioning fragile and a mid-month flash crash briefly pushed BTC below $77,000, triggering around $657m in liquidations.
Across the broader market, mid-caps and long-tail assets lagged as traders de-risked into larger-cap majors and stablecoins. The altcoin season index read 45/100, below the 75 threshold that defines a confirmed altcoin season.
Institutional Flows
ETF flows weakened materially in May. US Bitcoin spot ETFs recorded net outflows of approximately $2.3bn, the largest monthly redemption of 2026, reversing inflows of roughly $1.97bn in April, with a record multi-day outflow streak late in the month. ETH spot ETFs also turned negative, with net outflows of roughly $400m and an extended multi-week outflow streak.
Market Structure & Dominance
Bitcoin dominance held broadly steady at approximately 58.6% through the drawdown. The absence of rotation out of BTC indicated that the retracement was systemic de-risking rather than a rotation between majors and smaller-cap assets. Total digital asset market capitalisation closed May at approximately $2.58tn, a contraction of approximately 8% month on month from about $2.81tn.
DYDX Token Update
DYDX materially outperformed the broader benchmark basket in May (except for Hyperliquid). The token opened the month at approximately $0.151 and closed at approximately $0.185, delivering a 22.4% monthly return. Over the same period, BTC returned -4.9%, ETH returned -11.9%, and HYPE returned 71.8%. Indexed from 100, DYDX ended the period at 122.4, compared to BTC at 95.1, ETH at 88.1 and HYPE at 171.8. DYDX traded down to an intra-month low of approximately $0.135 on 18 May before recovering, with the local high of approximately $0.195 reached on 8 May. (BTC and ETH are indexed from Dune Analytics daily prices, consistent with the Market Update; DYDX and HYPE are from CoinGecko.)
Trading activity on the dYdX perpetual venue remained concentrated in the major pairs during May. BTC-USD generated approximately $2.59B in notional volume across 739,016 trades, accounting for 74.67% of total platform volume. ETH-USD ranked second with approximately $504.33M in notional volume across 149,303 trades, representing 14.52% of total activity. SOL-USD remained the third most active market at approximately $293.94M across 67,814 trades, equivalent to 8.46% of platform volume. Total platform volume was approximately $3.47B.
Outside the top three pairs, activity was fragmented. XRP-USD generated approximately $25.45M across 7,391 trades, while PAXG-USD recorded approximately $4.71M across 18,213 trades, with the long tail of markets each below 0.1% of platform volume, underscoring that venue activity continues to be driven primarily by BTC, ETH, and SOL.
Buyback Programme — May Update
Open-market activity acquired 1,382,792 DYDX at an average price of $0.15294, executed across 5,703 orders, for a total outlay of 211,484 USDC. Execution generated positive slippage of approximately $855.43, alongside $211.48 in exchange fees, indicating that aggregate execution was better than the benchmark price used for slippage measurement.
No OTC transactions were executed during May, with all DYDX buyback activity conducted through open-market purchases. Tokens were periodically transferred to the Treasury SubDAO buyback account. All buyback activity remains visible through the community-maintained Buyback Dashboard.
Staking Programme
Following April’s ad hoc staking rebalance, the validator set was stable in May. Validator performance is continuously monitored for uptime and reliability. The objective remains unchanged: maintain strong uptime, preserve diversification across the active validator set, and keep dYdX productively deployed at all times.
Asset Allocation
As of 31 May 2026, the Treasury SubDAO’s total funds stood at approximately $22.50M, up from approximately $19.05M at the end of April, driven primarily by DYDX price appreciation over the month. The portfolio currently consists of:
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88.10 M DYDX (74.46%)
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5.75 M USDC (25.54%)
Capital utilisation stood at 76.84%, with the majority of DYDX productively deployed across the staking set and a portion of stablecoins newly allocated to DeFi opportunities.
Yield Generation
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Staking Programme: $7,660 USDC generated by the Staking Programme.
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DeFi deployment: Executing the mandate approved under Proposal #372, during May the Treasury made its first Ethereum-based DeFi allocation, deploying approximately $500,000 of stablecoins into the kpk USDC Prime Core vault on Morpho. The vault is a very low-risk, kpk-curated, non-custodial ERC-4626 USDC strategy with 24-hour automation: deposits are continuously rebalanced across liquid, blue-chip (Tier A) lending markets under strict collateral filters and supply caps, monitored by KPK’s agents, which can cut exposure within seconds if conditions deteriorate.
The allocation diversifies treasury yield beyond Cosmos-based DYDX staking. The vault currently earns a net APY of approximately 3.7% (7-day 3.83%, 30-day 3.91%) with no performance or management fees, and is expected to track prevailing low-risk USDC lending rates. It carries no lock-up and is fully liquid — the entire balance is withdrawable on demand.
Next Steps for June
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Buyback programme: continue DYDX purchases across CEX and OTC channels.
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Continuous review of the Staking programme, ensuring the active set of validators is supported by the community rather than primarily by the Treasury SubDAO’s current delegations.
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Monitor the newly deployed kpk USDC Prime Core V2 vault position and assess further stablecoin deployment opportunities.