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DYdX Proposal to Slash Token Issuance Wins Early Support

DYdX Proposal to Slash Token Issuance Wins Early Support

CoindeskCoindesk2023/07/31 09:15
By:Sage D. Young

In theory, this could boost the price of DYDX, based on the basics of supply and demand.

The governance vote comes almost a month after dYdX, which has about $346 million in total value locked, launched its public test network on Cosmos.(Bettmann/Getty Images)

Community members of dYdX, the large decentralized exchange (DEX) for trading perpetual contracts, 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.

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 curren t prices. Antonio Juliano, dYdX’s founder, (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 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 .

Edited by Nick Baker and Bradley Keoun.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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