A new model for token holder alignment is quietly taking shape on the dYdX Chain. The dYdX Buyback Program - governance-approved and revenue-backed -has been acquiring DYDX from the open market and staking it to secure the network. Let’s unpack how it works and why it matters ↓

The premise is simple: As the protocol earns fees, a portion is used to buy DYDX and stake it. But the implications are broader: - Strengthening the network and validator incentives - Reducing DYDX circulating supply - Converting protocol usage into token demand

All buybacks are powered by actual protocol usage - perpetuals trading volume that generates real fees. The result: a sustainable and circular economic model.

Let’s step back for a second: Most DeFi protocols rely on inflation-based rewards to bootstrap usage. dYdX flipped the model - first by building a high-performance chain, then redirecting earned fees back into the ecosystem. Buybacks are one part of this broader flywheel.

There’s also strategic upside: As DYDX staking becomes more attractive - via both buybacks and native yield - more tokens are locked, and the network becomes more resilient. Staking is no longer just a governance signal. It becomes structurally integral to the protocol’s economics.

And it’s not static either. It is worth noting that the dYdX DAO also has the ability to increase the allocation for buybacks in the future. This turns every dollar of revenue directed into the Buyback Program into a direct mechanism for reducing circulating supply and reinforcing the value proposition of the DYDX token.

Zooming out: - $1.46T+ lifetime trading volume across all protocol versions - $316B since the launch of the dYdX Chain - $56M in net protocol fees - 70,700+ token holders - 306M+ DYDX staked With Spot and EVM support on the horizon, protocol revenue - and therefore buybacks - are positioned to grow.

The dYdX Buyback Program is a case study in how decentralized governance can design and execute long-term capital allocation strategies. It connects protocol health with the token’s value proposition in a way that’s measurable, adaptive, and community-driven. A model worth watching.