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DYdX Proposal to Slash Token Issuance Wins Early Support
In theory, this could boost the price of DYDX, based on the basics of supply and demand.
Updated Jul 31, 2023, 5:15 p.m. Published Jul 31, 2023, 5:15 p.m.
Community members of dYdX, the large decentralized exchange (DEX) for trading perpetual contracts, are voting on whether to slash rewards to liquidity providers, a move that could save the business $1 million a month and slow issuance of its DYDX token.
And based on the votes submitted so far, the proposal appears on track to pass.
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If passed – voting ends Tuesday – the governance proposal will reduce the amount of DYDX given to liquidity providers per epoch to 575,342, a 50% decrease that amounts to about $1 million at current prices. Antonio Juliano, dYdX’s founder, said on X (the site formerly known as Twitter) that overall DYDX token emissions would be cut by roughly 25%.
In theory, less issuance could be a net positive for DYDX’s price based on the basic laws of economics (limiting supply can boost prices).
The change would be an “overall positive for the community,” per the proposal’s forum discussion posted by Max Holloway, CEO of blockchain research and development firm Xenophon Labs.
The price of DYDX, the native governance token for the decentralized exchange, is up 2.3% in the past 24 hours, according to CoinGecko.
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