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Stride and dYdX community consider major staking collaboration to secure network
Stride and dYdX community consider major staking collaboration to secure network
- Stride proposes to stake 20 million DYDX tokens ($67 million) from the dYdX community pool to increase economic security and redistribute validator stake weight.
- The dYdX chain has a staking discrepancy, with $388 million staked out of a liquid supply worth over $1.08 billion, highlighting the need for treasury diversification.
- Stride will manage staking logistics, proposing a reduced protocol fee to ensure more rewards flow into the community treasury, with a community vote scheduled for March 19 to 23.
Stride, a multichain liquid staking protocol, has proposed a collaboration with the dYdX community to stake 20 million DYDX tokens, equivalent to $67 million, from its community pool into Stride 2’s liquid staking protocol. The aim of the proposal is to enhance the economic security of the dYdX chain and redistribute stake weight among validators more equitably.
According to the proposal, the dYdX chain currently has 115 million DYDX tokens, valued at $388 million, staked, in contrast to a liquid supply exceeding 320 million DYDX tokens, worth over $1.08 billion. Despite an increase in deposits on the chain, there has been a stagnation in the staking of DYDX tokens.
Staking Mechanics and Community Decision Process
The proposal emphasizes the importance of diversifying the community treasury to counter potential malicious activities as the community treasury and deposits grow.
Stride’s proposal outlines that the dYdX community would only need to decide on the total amount to be staked, with Stride managing all other aspects, including validator selection, staking amounts, compounding rewards, and redelegations as necessary.
The proposal also details the staking rewards mechanism within the dYdX ecosystem, where rewards are generated from user fees on trades and accrued in USDC stablecoins. Stride has an auto-compounding mechanism for rewards back into staked DYDX, which allows the community treasury to grow over time. Stride proposes reducing its protocol fee on the staked position from 10% to 7.5%, ensuring a larger portion of USDC inflows from staking rewards goes directly to the community treasury.
The proposal was shared on the dYdX forum on March 15, with a signaling post scheduled for March 19, concluding on March 23. This initiative is set to foster discussion within the dYdX community regarding the staking collaboration with Stride.
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Damilola Lawrence
Damilola Lawrence has covered news on crypto markets and tech for over 5 years. He has previously shared crypto insights and analysis for TheShibMagazine, CryptoMode, Qweens Magazine, and The Recording Academy before pivoting into Web3. At Cryptopolitan, he is a crypto price prediction specialist. After finishing a bachelor’s degree, he has segued into a master’s degree in IT Cybersecurity at Maria Curie-Skłodowska University.
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