The information about dYdX (ethDYDX) is gathered from posts on X and various web sources. The dYdX (ethDYDX) token is an ERC-20 token launched on the Ethereum blockchain, serving as the governance token for the dYdX Layer 2 protocol, known as dYdX v3. It was introduced on August 3, 2021, by dYdX Trading Inc., founded by Antonio Juliano, with a total supply of 1 billion tokens minted at launch. Built on StarkWare’s StarkEx scalability engine, ethDYDX enables decentralized governance for the dYdX v3 platform, a decentralized exchange (DEX) focused on perpetual futures trading. The token allows holders—traders, liquidity providers, and partners—to collectively influence protocol parameters, aligning incentives and fostering community control over the platform’s development.

The ethDYDX token’s primary utility lies in governance, enabling holders to propose and vote on changes to dYdX v3, such as trading rewards or fee structures, without requiring staking. It was initially distributed over a five-year vesting period, with allocations adjusted through community governance proposals over time. The token also played a role in the ecosystem’s evolution, as dYdX transitioned from Ethereum’s Layer 1 to a Layer 2 solution to enhance transaction speed, eliminate gas costs, and reduce trading fees, leveraging zero-knowledge proofs (zkSTARKs) for off-chain transaction batching and on-chain verification. The token’s contract address on Ethereum is 0x92D6C1e31e14520e676a687f0a93788B716BEff5, and it integrates with Ethereum wallets like MetaMask for storage and trading on platforms like Uniswap.

In June 2022, dYdX Trading Inc. announced the dYdX Chain, a standalone proof-of-stake Layer 1 blockchain built using the Cosmos SDK, prompting a migration process for ethDYDX. Through the wethDYDX smart contract, users can lock ethDYDX on Ethereum to receive wrapped ethDYDX (wethDYDX) on a 1:1 basis, which retains governance utility in dYdX v3. Validators on the dYdX Chain then distribute corresponding DYDX tokens on the new chain, expanding the token’s role to include staking and network security alongside governance. This migration, supported by community votes in 2023, reflects dYdX’s shift toward full decentralization, with ethDYDX holders able to bridge tokens to the dYdX Chain for enhanced functionality.

The dYdX platform, launched in 2017, initially offered margin trading and derivatives on Ethereum before introducing perpetuals on Layer 2. ethDYDX emerged as a key component post-2021, rewarding early users and driving ecosystem growth. Backed by investors like a16z and Paradigm, the project has emphasized advanced trading features—like up to 20x leverage on perpetual contracts—while maintaining a non-custodial, intermediary-free model. The token’s design supports a robust ecosystem around governance and rewards, with the dYdX Foundation and community playing central roles in its ongoing development and the broader vision of decentralized finance (DeFi).