dYdX Community Approves $60M for Security Boost

The dYdX community has decided to stake twenty million dYdX Chain tokens with Stride for safety.

To ensure the safety of the decentralized exchange dYdX, the dYdX community has reached an agreement to stake 20 million dYdX Chain tokens with Stride, a supplier of staking services for the Cosmos blockchain.

Antonio Juliano, the founder of dYdX confirmed the decision on X. Notably, 60 million dollars is the volume of tokens that have been approved for the staking exercise.

The current market value of the tokens, set at $3.06, forms the basis for this figure. dYdX Community immediately announced its intentions to reorganize its activities by establishing a legal organization in the Cayman Islands, leading to this significant achievement.

This dYdX decision comes as the DEX begins to see a sudden increase in activity, and it is the outcome of a proposal that was passed on April 6th. In addition to encouraging stakeholder diversity in its community, this decision comes amidst an unexpected surge in activity.

Specifically, 91.7% of the participants voted in favor of the proposal to stake the dYdX tokens.The stake rate of DYDX to validators has plateaued, while the rate of deposits to the exchange is rapidly expanding.

According to dYdX community, dYdX currently holds over 140 million USDC, with approximately 100 million USDC arriving in the past week.The approval of the proposal, according to several individuals who did not vote in favor of it, could negatively impact the token’s desirability.

Their opinion was that it might result in a decrease in dYdX’s annual percentage yield (APY), which would make the token less appealing to new investors.Staking its token, on the other hand, is a method by which dYdX can safeguard its network against the possibility of a control attempt.

dYdX Community Staking To Checkmate Bad Actors

According to some who are at the forefront of innovation, this is similar to a 51% attack, which occurs when a malevolent actor takes control of a significant portion of a blockchain’s hashing power and leaves the network vulnerable to manipulation.

According to dYdX’s explanation, the malevolent actor would need to invest at least $912 million in staked DYDX to gain control of the protocol and exploit user deposits and community assets.

“The voting power available today is $456 million.”The design rewards staked dYdX tokens with USDC, a stablecoin based on the US dollar. Compounding USDC into dYdX tokens over time would create a flywheel effect for stakers.

In the context of this discussion, Juliano stated that “the yield from fees generated will be continuously used via Stride to buy DYDX, which will then be returned to the Treasury.”