Summary
This proposal seeks community approval to distribute $100,000 in DYDX as rebates for the second distribution of January’s Loss Rebate Program (January 16-31). Rewards will be allocated proportionally to the 96 eligible traders who incurred the largest realized losses.
Abstract
This proposal outlines the second biweekly distribution under the Loss Rebate Program in January, providing partial compensation for realized losses incurred by the most impacted traders. The objective of this distribution is to support trader retention and engagement.
The proposal requests the distribution of $100,000 in DYDX to the 96 eligible accounts with the highest realized losses as of January 16-31, 2026, using a proportional allocation methodology.
Motivation & Rationale
The Loss Rebate Program was designed to assess whether partial, targeted rebates can mitigate the negative effects of events, improve trader sentiment, and encourage continued participation without distorting risk-taking behavior.
This distribution proposes allocating $100,000 in DYDX to the 96 eligible addresses with the highest realized losses. Analysis of loss concentration shows that a small number of traders again account for a disproportionate share of total losses, resulting in an average recovery rate of 0.71% for eligible participants in this tranche.
The $100,000 distribution size reflects an intentional pacing of incentives, ensuring that sufficient funds remain available for subsequent distributions and allowing the community to assess the program’s effectiveness over time.
Program Report
This report summarizes traders’ P&L and rebate eligibility for the second distribution period of the Loss Rebate Program in January.
- Total realized losses: $14.2 million between January 16-31, 2025. The current leaderboard can be found here.
- Eligible addresses: 96 addresses, representing the largest realized losses from eligible addresses for the period between January 16-31, 2025.
- Rebate allocation: $100,000 in DYDX, equivalent to 714,285.71 DYDX, calculated using a 7-day TWAP of $0.14.
- Distribution method: Rewards will be distributed proportionally to eligible addresses based on realized losses, subject to successful claim submission as outlined below.
Specification
We request $100,000 in DYDX (equivalent to 714,285.71 DYDX, based on the 7-day TWAP of $0.14) from the Community Treasury to be distributed to the 96 eligible addresses, as detailed here.
As previously approved, the distribution will be executed via a claim-based flow implemented on dydx.xyz, with eligible users notified through in-app or web notifications and directed to a dedicated claims page. Funds will be transferred to an account controlled by CLC (dydx1lxjqtqzsnnxygkax03d8ygxrm7er23xjqpg4e6) for distribution, with all transactions publicly verifiable via a block explorer. Eligible users will receive DYDX rewards within 7 days of submitting a valid claim, and the claim window will remain open for 30 days, after which any unclaimed funds will be returned to the Community Treasury.
Next Steps
We plan to submit the on-chain proposal for the distribution funds shortly.