Stride’s new staking protocol raises dYdX stake: A new economic boom

To help secure its network, the multichain liquid staking protocol Stride is encouraging the dYdX community to stake 20 million DYDX ($67 million) from its community pool using Stride 2. A revolutionary measure has been taken to enhance the economic security of members of the dYdX community by redistributing stake weight and chains among suitable validators.

The stride proposal indicated that the dYdX chain had recently acquired 115 million DYDX, valued at $388 million. In contrast, the quantity of liquid supply tokens is estimated to exceed 320 million DYDX, worth $1.08 billion. Currently, it is postulated that the total value locked (TVL) or deposits on the dYdX chain amount to $140 million, with the market value of 114 million DYDX tokens being $486 million.

This proposal also contains observable benefits, such as granting ownership to the dYdX community to safeguard users’ interests. They can enhance their economic stability by supporting dYdX’s expansion. It grants the community flexibility in resolving the high-stakes issues associated with weight allocation to the most senior validators. Active validators are thus capable of proactively validating with a reduced voting power. Additionally, it expands the dYdX community’s treasury’s diversification into USDC.

The fact that the majority of transaction and trading fees are denominated in USDC demonstrates that dYdX chain participation can concurrently increase the yield for holders. In Cosmos, stDYDX is utilized in a variety of DeFi use cases and provides a stable source of collateral assets with a non-inflationary yield. Although DYDX token stakes remained unaltered and the number of main chain deposits increased, it was determined that malicious activities were likely to increase in tandem with the expanding community treasury.

The rewards for dYdX staking can be gained by paying user fees on the trade protocol, which accumulate in the form of USDC stable coins. A system for auto-compounding rewards established in staked DYDX predicts that the community treasury will accumulate over time. Stride’s protocol fees have increased to 10% in consideration of liquid token staking incentives. This observable protocol reduces the charge by 2.5% to 7.5% based on stake positions. It suggests that stake payouts generate USDC inflows and end up in the community treasury. Furthermore, 90% of incentives commence the auto-compound of DYDX within the community treasury, with 2.5% of prizes in the form of USDC and 7.5% going to the Stride protocol.

The dYdX chain has been established as a proof-of-stake protocol utilizing CometBFT for consensus and an active set of sixty validators. Used for staking, the L1 token of this blockchain is dYdX. It facilitates network security and acts as a regulator of the dYdX chain. 

Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.

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