DeFi Trade Platform dYdX is Releasing its Governance Token

Kavya  |  Aug 4, 2021

According to the foundation website, DeFi's trade platform dYdX is releasing its governance token. Ex-dYdX users receive 7.5% of the provision. In this instance. The token distribution is scheduled to take place over a period of five years.

DeFi Platform, dYdX Is Releasing Its Governance Token

As with prior governance token releases, a part of the first supply will be allocated to former protocol users who satisfy specific criteria. 

The launch is noteworthy since it comes from a big decentralized financial system. In some ways, it is similar to projects like Uniswap (UNI) and Compound (COMP), which have decentralized their governing structures through the retroactive airdropping of tokens to their userbase.

It Will Determine How The Protocol Progresses

The governance token will be used to define the protocol's future direction, and token holders will be able to vote on new feature requests. This will happen on the recently announced governance system.

"dYdX provides a strong ecosystem centered on governance, incentives, and staking each meant to encourage future growth and decentralization of dYdX, resulting in a better user experience," the team stated.

According to the foundation, an extra 5% of the overall supply will be used to support an R&D treasury "to be allocated on an ongoing basis through contributor awards, community initiatives, liquidity mining, and other activities."

The site also mentions what appear to be regional limits on the token. "dYdX is not available in the United States or other restricted countries. 

You are not authorized to receive or transact in dYdX if you are a resident of, or incorporated or based in, the United States of America or another banned jurisdiction."

dYdX's work on decentralized governance was hinted at in remarks earlier this year.

"Over time, our team has been actively studying the best ways to decentralize the protocol." “Decentralization will be a progressive process that might eventually end in a DAO [decentralized autonomous organization] to manage the community,” said creator Antonio Juliano at the time.

dYdX raised $65 million in a financing round headed by Paradigm in June.

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