What To Know:
- dYdX community proposed using 100% of protocol fees for DYDX token buybacks from November 1, 2025, to January 31, 2026, as a trial to test new economic parameters.
- The plan aims to boost token value and holder alignment, with validator and staker rewards covered by the treasury during the experiment.
- If approved, the initiative could see $5–10 million worth of DYDX repurchased, following similar successful models like Hyperliquid’s buyback system.
The dYdX community has raised a proposal to allocate all protocol fees toward DYDX token buybacks for a three-month experimental period. The initiative will be running from November 1, 2025, to January 31, 2026, and intends to strengthen the token’s value accrual and test new economic parameters across the network.
dYdX Proposes A Solution for Boosting DYDX Value
Under the plan, 100% of the net trading fees from the dYdX chain will be used to purchase DYDX from the open market. Validator and staker rewards will instead be covered by the community treasury during the trial to preserve network security while making sure that fee revenue directly benefits token holders.
If approved, the proposal will start on November 3 and automatically revert to the last allocation model once the three-month window ends. This would be the case unless the community votes for an extension. The Treasury SubDAO estimates that between $5 million and $10 million worth of DYDX could be repurchased during the trial period.
The initiative builds on the dYdX Buyback Program approved earlier this year, which dedicated 25% of net trading fees to token repurchases. That program has already purchased more than 5 million DYDX by October 2025, using a time-weighted average price (TWAP) mechanism on exchanges like Binance, followed by staking the acquired tokens.
Currently, dYdX’s fee distribution stands at 25% for buybacks, 40% for staking rewards, 25% for Megavault liquidity, and 10% for the treasury. The proposed change would temporarily allocate the entire fee pool to buybacks. This move are viewed by some as necessary given the protocol’s current valuation metrics.
With annualized trading fees estimated between $20 million and $40 million, and a market capitalization of roughly $320 million at a token price near $0.33, dYdX’s price-to-earnings ratio remains relatively low—around 8 to 16. Advocates believe the trial could strengthen price support and bring the token’s valuation more in line with revenue performance.
It is worth mentioning that the idea draws inspiration from Hyperliquid’s model, where nearly all fees are used for token buybacks through its Assistance Fund. That approach has previously led to notable price appreciation and closer alignment between token value and protocol income.
Community sentiment on X and Discord has shown interest in a similar structure for dYdX, especially as the protocol continues to expand its decentralized trading ecosystem. Many contributors see the trial as a low-risk way to assess capital efficiency and holder alignment, given the treasury’s large asset base of more than $100 million.
Still, the discussion around fee allocation has surfaced familiar concerns. Some participants warn that diverting all fees from Megavault liquidity could affect pool competitiveness. Others posed a doubt if short-term buybacks will have a lasting impact on price or token demand. Some are also demanding better transparency around treasury spending and audit processes before committing to a full allocation shift.
Supporters argue that the trial period brings in a controlled experiment. It would generate concrete data on how fee redirection affects DYDX’s market performance, staking participation, and overall liquidity. The temporary nature of the plan also makes sure that the protocol can revert to the previous model without disruption if the results are inconclusive.
The proposal comes at a crucial time for dYdX, after a recent chain outage that affected a small portion of traders. The incident was traced to a sequencing error during collateral pool transfers, which triggered a safety mechanism halting the chain. The team has since corrected the root cause and executed new operational checks to prevent recurrence. Compensation for impacted users is currently being reviewed by the community.
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