The dYdX Token Supply Unlock and Price Impact
The dYdX team is preparing to release 30% of the DYDX token supply, causing a potential drop in price. On December 1, 2023, decentralized exchange dYdX will issue 500 million DYDX tokens to previous investors of dYdX Trading Inc.
Lookonchain, a blockchain analytics firm, reports that the dYdX Foundation has sent tokens to investor addresses such as a16z crypto, Defiance Capital, and Polychain Capital. However, many investors have bridged DYDX through the wethDYDX smart contract, allowing tokens to be transferred from Ethereum to the dYdX Chain network.
Currently, over 437.4 million DYDX tokens (worth nearly $1.5 billion) have been bridged, accounting for more than 40% of the total supply. As a result of this news, the price of DYDX dropped by approximately 7% to $3.2 according to CoinGecko.
DYDX Migration to dYdX Chain
In October 2023, the dYdX Foundation introduced significant updates signaling a new phase for the ecosystem. The mainnet genesis of the dYdX Chain was launched with the participation of genesis validators who created its first block.
The current phase consists of two stages: alpha and beta. The alpha stage focuses on enhancing network stability and security. Staking DYDX tokens to dYdX Chain validators is crucial for improving network resiliency against coordinated attacks.
The transition to the beta stage will depend on performance metrics and a successful governance vote. This stage will introduce limited trading functionalities and prepare for a complete version of the dYdX Chain.
Hot Take: DYDX Token Supply Unlock May Impact Price
The upcoming release of 30% of the DYDX token supply to investors on the dYdX Chain has led to a decrease in price. As tokens are distributed to investor addresses, many have chosen to bridge their DYDX holdings to the dYdX Chain network. Over 40% of the total supply has already been bridged, worth nearly $1.5 billion.
This significant migration has resulted in a drop in DYDX price by approximately 7%. However, the migration to the dYdX Chain marks an important milestone for the ecosystem, as it progresses towards enhancing stability and security. The transition to the beta stage will introduce additional functionalities and pave the way for a fully operational dYdX Chain.
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