I don’t think anyone needs an explanation that dYdX is at a stage where it needs to define its direction—where the protocol is headed, what’s happening with the token price, and the overall interest in it.
I suggest that everyone who cares about the future of dYdX participate in this discussion.
It’s sad to say, but we might have lost this cycle to competing products. Although dYdX has certain advantages worth betting on, there’s no guarantee it will lead to success.
Personally, I believe dYdX should aim to achieve Product-Market Fit (PMF) for what the dYdX chain was originally built for: decentralization, transparency, an efficient community DAO , and no compromises.
@kpk proposed a token buyback. As I mentioned, I generally support this idea, but without cutting monthly expenses, it won’t lead to anything. First, it’s a drop in the bucket. Second, we’d essentially buy tokens from the market, put them in the treasury, and then inefficiently spend them.
How can we reduce expenses?
Start by defining who does what within the dYdX ecosystem and eliminate overlapping functions.
For example, if the Foundation handles marketing, institutional partnerships, and governance, other subDAOs shouldn’t be doing the same.
Here are the structures currently funded by the treasury (selling tokens):
- dYdX Foundation
- dYdX Grants
- dYdX Ops
- Treasury SubDAO
Let’s leave dYdX Trading aside—they’re working on protocol development (they have significant funding reserves, but long-term, we need to understand their motivation; everyone should be compensated for their work).
I’ll take the protocol’s revenue over the last 30 days from DefiLlama: $1.33M USD, and compare monthly expenses to this figure.
Now, regarding expenses, here’s my personal opinion:
- dYdX Grants: Operational expenses alone (excluding grants) exceeded $90K (6.8%) last month (this was the latest payment). Including grants, the amount is significantly higher—around $600K or ~45%. I’d like to see a detailed report on the results of these grants.
Don’t just talk about 3-5 year plans and strategic partnerships. The community needs to determine if these expenses bring value to the protocol. Nearly $0.5M for long-term affiliate program collaborations? What has the protocol gained from this? Why such a long-term bet? Do we seriously think paying Reverie $70K/month is justified? Is it normal for one grantor to work on three projects simultaneously, while the other’s role is unclear? - dYdX Ops DAO: We still haven’t seen the full 2024 report. According to Valentin, monthly expenses are $400-450K, or 33% of revenue. I skimmed the preliminary accounting report, and some expense items are concerning:
- Travel expenses: I saw Four Seasons Hotel charges totaling $28,729 across 4 transactions. Seriously, Four Seasons??? Total travel expenses for 2024 were $120K. This brings us back to overlapping functions—if the Foundation handles partnerships, where is Ops DAO traveling for $10K/month? A $1,200 DOS Xmas party for a remote team—isn’t that excessive?
- Salaries: Paid in USDC, dYdX tokens, from different wallets, etc. It’s unclear who performs which functions. For example, Stan is listed as a Governance Associate, but isn’t governance the Foundation’s responsibility? I’m not discussing compensation or bonuses here. I’m not attacking individuals, but please clarify roles.
- Indexer: I’d like clarity on what portion of costs goes to infrastructure versus Imperator. Yesterday, I saw Imperator bought a Hype token on the HL platform for $160K. They’re a commercial entity and can do what they want, but if they had bought dYdX tokens for a comparable amount while the token is at ATL, this concern would vanish. I haven’t seen that. They’re the service provider receiving the most funding—I’d like to see some faith in dYdX.
- dYdX Foundation: I think they can publish their expense structure by category and some report on what worked and what didn’t. At least this structure didn’t immediately swap tokens for stables after receiving them, which shows they believed in the project’s success.
- Treasury SubDAO: There’s still little data, but I feel they should take more initiative on long-term project funding. If we’re spending 2-3x revenue monthly (and I’m not even mentioning that a only tiny portion of revenue goes back into the protocol)
I want to preempt the argument that top-tier employees and partnerships require top-tier pay. But then we should demand top-tier results—personally, I don’t see them. We can’t just burn money; it will run out soon.
I know I’ll get a lot of hate for this post, but someone had to ask these questions.
I want to invite all the stakeholders of dYdX and @antonio into this topic and discuss were are we going? Lets do the AMA with the subDAOs