dYdX Up 21% After Community Approves Proposal To Reduce Trading Rewards
- The dYdX community concluded a vote today to approve a proposal that will reduce trading rewards by 45%.
- The result sent the decentralized crypto exchange’s native token soaring by over 21%.
- The proposal saw overwhelming support from community members with over 91% of the votes in favor.
- Wintermute Trading’s DeFi envoy Callen Van Den Elst proposed the reduced trading rewards last month.
The community behind dYdX has voted in favor of a key governance proposal that sought to reduce the platform’s trading rewards by almost half. The proposal’s approval had a positive impact on the decentralized exchange’s (DEX) namesake native token, which saw double-digit returns.
dYdX will reduce trading rewards by 45%
According to dYdX’s governance forum, the proposal to slash trading rewards by 45% was introduced by crypto market maker Wintermute’s DeFi envoy Callen Van Den Elst last month. The proposal came in light of the downturn in the crypto market which according to the envoy, made the trading rewards excessive since they were the highest contributor to yearly token inflation.
By reducing trading rewards, excess DYDX are retained in the rewards/community treasury. This can be accessed by the community through a governance vote, but most importantly, the retained DYDX will have a significant impact on the DAOs ability to fund initiatives in V4 in a sustainable and controlled manner!”
The proposal witnessed overwhelming support from the community with the votes in favor of reducing the DEX’s trading rewards outweighing the votes against by over 20 million dYdX. dYdX’s native token rose more than 21% following the approval and is currently trading at $2.42. The on-chain vote came nearly a month after the DEX’s held a Snapshot vote to gauge the community’s sentiment towards such a proposal. The vote was approved with over 91% in favor.
The latest change is part of Wintermute’s V4 Vanguard post which laid out a 6-fold plan to make the DEX a sustainable and neutral trading powerhouse. The plan includes reducing trading rewards, adjusting maker and taker fees, introducing a market maker rebate program, removing trading fee discounts, implementing a yearly reduction in token emissions and amending the distribution of rewards, and finally, introducing allocations for trading rewards per market.
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