Approval of 20M Token Stake as dYdX Community Thrives
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Approval of 20M Token Stake as dYdX Community Thrives
The dYdX decentralized crypto exchange (DEX) has received approval from its community to stake 20 million DYDX tokens in order to enhance its security. The proposal, passed with 91.7% of votes in favor, allows tokens from the community treasury, valued at over $61 million, to be staked with the liquid staking protocol Stride. This decision was made in response to the increasing trading activity on the dYdX protocol, with substantial deposits being made on the exchange. Staking involves locking cryptocurrency to support a blockchain network’s operations, and participants are rewarded for their service and bear the associated risks.
By staking its native tokens, dYdX aims to protect its network from potential control attacks, which could manipulate the network if a malicious entity gains a majority of the voting power. The decentralized nature of the voting power prevents such attacks. dYdX has highlighted that an attacker with just one-third of the voting power could pause on-chain operations, while possessing two-thirds of the voting power could potentially enable misuse of user funds and community assets. Currently, only 11.5% of the total supply of DYDX is staked, making it vulnerable.
Staking rewards on dYdX are received in the stablecoin USD Coin (USDC) and are generated from the fees users pay for trading on the platform. The staked position will automatically increase over time through Stride’s recompounding mechanism. The dYdX community will be subject to a 7.5% fee for utilizing the staking service.
At present, the total value locked on-chain in dYdX is $504.48 million, and the network has generated over $48.59 million in fees in the past year, according to data from DefiLlama. This surge in staking and the implementation of Stride’s liquid staking protocol aim to strengthen dYdX’s security measures to enhance user trust and safeguard against potential control attacks.
I was hoping dYdX would prioritize user safety and security, but it seems like they’re more focused on generating fees.
Exciting times ahead for dYdX as they strengthen their security measures and continue to attract more users to their platform. The future looks bright!
I appreciate the transparency and proactive approach of dYdX in addressing potential security risks. This will foster a safer trading environment.
Staking is an excellent way to strengthen the network and reward participants for their service. It’s a win-win situation for everyone!
The dYdX protocol has come a long way, and this decision to stake native tokens shows their dedication to preserving the platform’s integrity. A solid move!
The decision to implement Stride’s liquid staking protocol is a clear indication that dYdX is determined to stay ahead of the game. Innovators in the crypto space!
Protecting against potential control attacks is essential in the crypto space, and I’m glad to see dYdX prioritizing security.