DYDX price has surged by nearly 9% after dYdX announced its new buyback program. The decentralized derivatives exchange will use 25% of the protocol fees to repurchase DYDX from the market. This is seen as a way of enhancing the utility of the token within the context of the platform as well as strengthening security in the network.
dYdX Allocates 25% of Fees To Buyback Initiative
On March 24, dYdX revealed that it would use 25% of its monthly protocol fees to purchase DYDX tokens. This is the first time it has established a buyback campaign on the platform. Preventing other entities from exerting control over the tokens is the primary reason the tokens will be held for a long time, a dYdX spokesperson said.
Earlier, all of the revenues in the dYdX protocol were shared with active participants of the ecosystem, including stakers and liquidity providers. In the new system, the 25% will be funnelled towards the buyback programme. Another 25% will be used for the platform’s MegaVault program, 10% to the treasury, while another 40% will go to staking rewards.
One of the significant issues of the announcement was the potential of the increased buyback share. People of the community also considering the possibility of increasing the buyback allocation to 100% of the net protocol revenue in the future, which will decrease the supply of DYDX tokens even more.
DYDX Price Technical Analysis
Following the news of the buyback program, the DYDX price surged by over 10%, reaching approximately $0.731. The token’s value has increased by over 21% in the past two weeks, reflecting positive market sentiment. The buyback program is seen as a way to strengthen the token’s value while addressing the recent downtrend in DYDX prices, which had fallen more than 78% over the past year.
The chart for DYDX/USD shows the price in an ascending triangle pattern, indicating consolidation with higher lows and a horizontal resistance at the $0.72 level. This pattern suggests breakout potential, as the price is currently testing the upper resistance trendline of the triangle. A breakout above this resistance could signal a strong upward movement in the DYDX price.
The Chaikin Money Flow (CMF) indicator currently supports a bullish trend, with a value of 0.10, signalling a slight influx of capital into the asset. However, the Relative Strength Index (RSI) sits at 67, approaching overbought conditions, which could mean the current bullish momentum might soon face resistance.
dYdX Platform’s Financials and Plans
This came as the dYdX platform further develops its features, yet the decision to discuss implementing protocol fees and allocating a certain amount for buybacks is a good move. Last year, in 2024, the trading platform earned $46 million in net revenue from the trading volume of more than $270 billion.
The platform is still developing for further expansion with plans to improve services and adding the next steps that include the Spot Trading and Multi-Asset Margining backed by the new IBC Eureka. All these measures are expected to open up new opportunities for the traders, and help ensure long-term growth.
Apart from the buyback program, some other changes have been made on dYdX tokenomics. DYDX token emission rate have been cut down and a further cut of 50% is expected to be made by June 2025. The migration from Ethereum to the dYdX Layer 1 is in progress, and most tokens are now transferred to the new chain. Concurrently, a proposal is being discussed to remove unbridged Ethereum-based tokens from circulation by June 2025.
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