Decentralized exchange dYdX will deploy 25% of its net protocol fees monthly to buy back its native token from open markets and stake the assets for better network security through its dYdX Treasury SubDAO, according to a blog post.

Approved by a community vote earlier this month, the first-ever dYdX buyback program changes how the protocol allocates its fees starting Monday. Ecosystem participants previously received 100% of the revenue generated by the DEX. Under the new structure, dYdX will spread protocol fees — some $17.5 million annualized per DefiLlama — across Treasury SubDAO (10%), MegaVault (25%), Buyback Program (25%), and Staking Rewards (40%).

Based on prices by publishing time, the DEX will have roughly $4.4 million over the year for spending on monthly buybacks. dYdX will also manage the repurchased crypto via its Treasury SubDAO to earn yield rather than destroy the tokens like in a traditional burn mechanism.

The buyback initiative to strengthen network security and decrease circulating supply comes as dYdX plans to slash token emissions by half this June. “As of March 1, 2025, 85% of $DYDX tokens have already been unlocked, with emissions set to decrease by 50% from June 2025. Since launching in 2021, $DYDX has reached a more advanced stage in its adoption cycle, with all token unlocks set to conclude by June 2026,” the announcement read.

The dYdX token jumped over 8% following the buyback reveal, trading above $0.71 to reach a $546 million fully diluted valuation.

Initially launched on Ethereum’s blockchain around April 2019, dYdX allows DeFi users to margin trade ERC-20 tokens. The protocol later added perpetual futures contracts in 2023 with its v3 rollout. It also transitioned from Ethereum to its custom Layer 1 network powered by Cosmos’ toolkit for extra speed and efficiency.

Although layoffs last year and the brief exit of Founder Antonio Juliano as CEO caused some concerns, the platform has since shipped new features to simplify token issuance. Juliano has also returned to his position after temporarily leaving his seat to serve solely as the startup's Chairman and President.

Update: Clarified the amount allocated for the monthly buybacks.