Dydx governance approved a major shift in revenue allocation on November 13, 2025, when Proposal #313 passed with 59.38% support after a three-day voting period that mobilized over 89 million DYDX tokens. The proposal reallocates protocol revenue to increase buybacks from 25% to 75% of net protocol fees, a change characterized by proponents as one of the most aggressive buyback programs in DeFi, and implementation began immediately on the vote’s conclusion. The decision reassigns 5% of protocol revenue to the Treasury SubDAO and 5% to the MegaVault, while the remaining allocation continues to support staking rewards from existing sources, preserving core incentives for validators and stakers. This approach aims to create engineered scarcity through token buybacks, which may influence price dynamics by reducing circulating supply.
The governance action builds on an initial buyback mechanism launched in March 2025, which previously allocated 25% of trading fees to repurchases and already executed purchases totaling over 5 million DYDX tokens, demonstrating operational readiness for larger-scale operations. Token emissions were scheduled to decline in June 2025 as part of broader tokenomics refinement aimed at tightening circulating supply, and the revised allocation intensifies that trajectory by tripling repurchase capacity, which is expected to exert significant downward pressure on free float. Historical DeFi precedent suggests buyback announcements correlate with positive token performance, with average gains near 13.9% following similar initiatives, though past performance is not a guarantee of future results.
Projected market impact estimates indicate the protocol could repurchase up to roughly 5% of total DYDX supply annually at current prices, a figure that depends on sustained revenue levels and market availability, and dYdX recorded $46 million in net protocol revenue during 2024 as a reference point. Current trading data shows DYDX at $0.32, down 75% year-over-year but up 4% in the last 24 hours, and the enhanced buyback program is intended to create buying pressure and address price weakness, subject to revenue continuity around $20 million annually. Outstanding implementation questions remain, specifically whether repurchased tokens will be burned or retained in the treasury, and the community faces operational choices about storage, reporting, and the continued use of open-market purchase mechanisms. An earlier governance vote also redirects 75% of protocol fees to buybacks. Additionally, the dYdX Foundation confirmed on X that 75% of protocol fees will be used to buy back DYDX on the open market.
