The native token of the popular decentralized exchange dYdX has surged more than 200% over the past 30 days as its trading volume keeps on rising and investors move their funds off of centralized exchanges in the wake of FTX’s collapse.
According to market data, the price of the exchange’s governance token $DYDX has now moved from around $1.4 at the beginning of the year to $3.5 at the time of writing, a more than 200% rise.
dYdX, according to Coinbase, is a layer 2 protocol built on top of an existing blockchain system. Its purpose is to enhance the transaction speed of cryptocurrency networks and improve blockchain efficiency.
As the governance token of the platform, DYDX gives the community complete control over the system. It allows traders, liquidity providers, and partners to work together on the dYdX layer 2 protocol, the exchange notes. The ecosystem around DYDX, including governance, rewards, and staking, is designed to drive its growth and decentralization for a better user experience.
DYDX token holders can propose and vote on governance decisions, while also being able to view their proposing and voting powers on a dashboard. The platform distributes trading rewards every 28 days, and features a community treasury built from 5% of its initial token supply. The treasury aims to fund programs and initials that help dYdX grow.
The exchange is supported by the non-profit organization dYdX Foundation, headquartered in Zug, Switzerland, which has recently released its “inaugural ecosystem annual report,” outlining the exchange’s development last year. It reads:
The dYdX ecosystem is thriving with contributions from DAO contributors and endorsed delegates, market makers, infrastructure providers, security and audit providers, researchers, and builders of DAO tools and analytics.
The exchange’s trading volume has also been noticeably growing, as it stood at around $500,000 per day late last year and is now consistently above $1 billion per day, according to available data.
Despite its growth, the DYDX token is still far below its all-time high near $28 seen in September 2021.
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