The dYdX Decentralized Exchange (DEX) community has decided to stake over $60 million worth of native currency as a security measure.
HISTORICAL POINTSA 20 million value of dYdX's native token will be staked.Over $60 million is thought to be the token's approximate value.As a security measure, the community decided to use this staking.
As a security precaution, the dYdX community has decided to stake 20 million dYdX Chain tokens with Stride, a Cosmos staking service.
A New Staking Action Is Required Due to Trading Surge
Antonio Juliano, the founder of dYdX, verified the announcement of the decision on X. Interestingly, the total amount of tokens authorized for the staking exercise is valued at $60 million, with the coins' current market value set at $3.06.
This milestone was reached by dYdX immediately following the announcement of plans to reorganize operations by establishing a Cayman Islands legal organization.
This dYdX move, which is the outcome of a proposal approved on April 6, comes as the DEX starts to see a sudden spike in activity in addition to promoting stake diversity in its community. Specifically, out of 81% of participants, the proposal to stake the dYdX tokens was approved with 91.7% of the votes.
"Deposits to the exchange are expanding at a phenomenal rate, but the rate at which DYDX is staked to validators has plateaued. Approximately $100M of the over $140M USDC held in dYdX v4 came in the last week, according to dYdX.
A portion of the voters who abstained from the proposition hold the opinion that its approval will have a detrimental effect on the token's allure. According to their opinion, it may result in dYdX's APY declining, which would make the token less appealing to new investors.
dYdX Staking To Stop Unreliable Performers
Nevertheless, dYdX can defend its network against a future control attempt by staking its token. Innovators claim that this is comparable to a 51% assault, in which a malevolent party seizes a substantial portion of a blockchain's hashing capacity and leaves the network vulnerable to manipulation.
"A malevolent actor would need to contribute at least $912M in staked DYDX to gain control of the protocol, which would allow them to abuse user deposits and community assets, given that the voting power now stands at $456M,” dYdX clarified.
The staked dYdX tokens will get rewards in USDC, a stablecoin tethered to the US dollar, according to the design. It would eventually compound into dYdX tokens, giving holders a benefit known as the flywheel effect.
In this particular context, Juliano stated that "the yield from fees generated will be continuously used via Stride to buy DYDX which will be returned back to the treasury."