dYdX Chain cumulatively spends nearly $1.9 million in fees to acquire and stake 2.8M tokens under 'buyback program'

Decentralized derivatives exchange dYdX has been allocating some of its trading fee revenue to repurchase and stake its own DYDX token, a governance-approved program that backers say turns protocol usage into direct token demand while enhancing network security for its Cosmos-based blockchain, known as the dYdX Chain.

Since the “dYdX Buyback Program” went live in March, a treasury address overseen by the dYdX DAO has spent $1.88 million in cumulative fees to acquire 2.87 million coins on the open market, then staked all of those tokens with validators, according to an update released Friday by the dYdX Foundation.

Unlike traditional decentralized finance incentives that rely on inflationary token emissions, dYdX funds buybacks entirely from perpetual-futures trading fees generated on its platform. The foundation stated that this loop strengthens validator rewards, reduces circulating supply, and boosts resilience.

The initiative, which allocates 25% of net fees to monthly purchases, was authorized through proposals 225 and 231 after overwhelming support for the plan. Additionally, the DAO can vote to increase the allocation for buybacks, potentially amplifying the flywheel effect. DefiLlama data shows dYdX has generated $15 million in annualized fees. According to The Block's price page, one dYdX token cost $0.68 as of July 18, down from its all-time high of $4.52. 

dYdX is not the only DeFi player with a buyback strategy. Platforms like Hyperliquid, Raydium, and Pump.fun have deployed fee revenue to purchase their respective native tokens from the market. The concept reflects an economic model designed to throttle token inflation and redirect protocol income to holders.