Overview
Chaos Labs is pleased to provide a comprehensive review of the second trading season on the dYdX Surge Program. This analysis encompasses all facets of exchange performance, emphasising 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. Please see this post for the latest program structure in season 3.
Key Stats:
- dYdX Chain has seen over 5.3bn in trading volume across 220 live markets.
- Over 5700 traders were active through season 2.
- Over $192m of open interest, up 21% from the beginning of the season.
- The dYdX Chain has approximately $218m USDC in TVL deposited on the exchange at the end of the season, up 4% from the beginning of the season.
dYdX Chain Trading
The second dYdX Surge Season has seen over $5.3bn in trading volume across 220 live markets. This is a decrease of 5% compared to the preceding 30-day period.
Open interest has increased over the season from $158m to $192m, an increase of 21%. Traders have been holding larger positions on dYdX this season.
Traders have paid almost $53m in fees to stakers securing the dYdX Chain since inception. $1.2m of this came in the second Surge season.
Volumes in major markets like BTC and ETH remained strong in Season 2, certain alt markets saw notable shifts. Despite 2x point incentives on pairs like SUI and XRP, volumes in these markets declined by 15% and 44% respectively, suggesting that incentive multipliers alone may not fully offset underlying market demand. Meanwhile, assets like LTC (+398%), AAVE (+180%), and DOGE (+42%) saw significant organic growth, indicating strong trading interest beyond incentive structures.
| Market | Season 2 | Season 1 | Change |
|---|---|---|---|
| BTC-USD | $2,175,273,671 | $2,306,940,757 | -5.71% |
| ETH-USD | $1,925,764,684 | $1,764,052,156 | 9.17% |
| XRP-USD | $272,318,326 | $489,015,802 | -44.31% |
| SOL-USD | $260,172,108 | $571,821,540 | -54.50% |
| DOGE-USD | $112,603,130 | $79,330,155 | 41.94% |
| AAVE-USD | $69,781,671 | $24,923,891 | 179.98% |
| SUI-USD | $62,716,532 | $73,887,601 | -15.12% |
| LTC-USD | $54,997,318 | $11,051,431 | 397.65% |
| BCH-USD | $31,616,529 | $15,133,689 | 108.91% |
| PEPE-USD | $24,339,043 | $24,239,516 | 0.41% |
dYdX Chain Liquidity
The early stages of the Surge Program focuses on takers, market a shift from the previous incentive program. Liquidity remains a key metric tracked to ensure that the majority of the improved liquidity remains.
See the table below for liquidity trends in some major markets sorted by traded volume.
| Market | Season 2 | Season 1 | Change |
|---|---|---|---|
| BTC-USD | $12,456,816 | $13,050,983 | -5% |
| ETH-USD | $8,715,656 | $9,374,847 | -7% |
| XRP-USD | $3,566,660 | $3,615,112 | -1% |
| SOL-USD | $1,185,056 | $1,298,685 | -9% |
| DOGE-USD | $638,291 | $699,981 | -9% |
| AAVE-USD | $619,571 | $642,869 | -4% |
| SUI-USD | $126,669 | $179,209 | -29% |
| LTC-USD | $96,784 | $171,586 | -44% |
| BCH-USD | $95,690 | $98,881 | -3% |
| PEPE-USD | $90,828 | $91,760 | -1% |
Orderbook liquidity remains broadly stable, with total liquidity slightly decreasing by ~3%.
| Orderbook Liquidity | Above $1000k | Above $500k | Above $250k | Above $100k | Above $50k | Above $10k | Total Liquidity ($m) |
|---|---|---|---|---|---|---|---|
| 30 days ago | 4 | 6 | 6 | 31 | 53 | 154 | 36m |
| Now | 4 | 6 | 6 | 31 | 52 | 145 | 35m |
Funding
During Season 2, average funding rates remained well-contained across major markets
| Market | Average | Median | Max | Min |
|---|---|---|---|---|
| BTC | -0.28% | 0.66% | 44.02% | -65.04% |
| ETH | 13.28% | 10.35% | 79.28% | -9.75% |
| XRP | 5.94% | 8.16% | 103.81% | -107.53% |
| SOL | -4.16% | -0.55% | 48.29% | -65.48% |
| DOGE | 0.44% | 0.00% | 36.46% | -29.78% |
| AAVE | -0.78% | 0.00% | 200.17% | -130.31% |
| SUI | 1.26% | 0.00% | 119.14% | -73.58% |
| LTC | 16.93% | 0.71% | 114.87% | -70.52% |
| BCH | -0.29% | 0.00% | 23.76% | -37.01% |
| PEPE | 0.09% | 0.00% | 31.97% | -11.28% |
Liquidations
During Season 2, liquidations reached $35 million across all markets, up 46% from the previous period.
The insurance fund now sits at over $14.4m, bootstrapped predominantly by protocol liquidation fees. Over $0.5m of this came over 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
Growing the number of average daily and weekly active traders on dYdX remains a key focus of the Surge Program, and in Season 2, weekly active traders increased further despite declining volatility levels.
| Week | Average Daily Active | Weekly Active | Average Weekly Volatility |
|---|---|---|---|
| 2025-01-06 | 1570 | 2262 | 20.03% |
| 2025-01-13 | 2265 | 3713 | 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 | 1731 | 2801 | 29.70% |
| 2025-03-24 | 1831 | 2814 | 29.57% |
| 2025-03-31 | 1918 | 2944 | 41.92% |
| 2025-04-07 | 1834 | 3427 | 54.21% |
| 2025-04-14 | 1540 | 2829 | 27.63% |
| 2025-04-21 | 2136 | 3450 | 31.18% |
| 2025-04-28 | 1852 | 3132 | 24.66% |
| 2025-05-05 | 2114 | 3614 | 31.59% |
| 2025-05-12 | 2085 | 3732 | 29.45% |
| 2025-05-19 | 2067 | 3358 | 34.97% |
| 2025-05-26 | 2097 | 3340 | 28.53% |
*Weekly active traders are defined as traders who make at least one trade during a week.
*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 Surge 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 2. We observe an increase in the cohort of traders who are active on almost a daily basis.
Weekly Trader Breakdown and Retention
The weekly trader retention rate showed renewed volatility - initially stabilizing near its seasonal peak, then declining sharply to its lowest point - indicating that while some traders continue to return, overall retention has softened compared to earlier highs.
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 | 52.37% |
| 2 | 73.88% |
| 3 | 68.31% |
| 4 | 76.00% |
| 5 | 96.19% |
| 6 | 95.78% |
| 7 | 91.35% |
| 8 | 87.74% |
| 9 | 86.19% |
| 10 | 92.55% |
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.