The dYdX Foundation announced its new revenue distribution model, approved by the community. A proposal to allocate 75% of protocol revenue to DYDX token buybacks was approved following a vote, and the decision went into effect the same day. Thus, the majority of the protocol fees generated by dYdX will now be used to purchase DYDX on the open market. Under the new model, 5% of the revenue will continue to flow to the Treasury SubDAO, and the remaining 5% to MegaVault. The foundation announced that this decision has increased the community buyback rate from 25% to 75%. The backdrop for the proposal was strong criticism of MegaVault's performance. Despite the current reward levels, interest in the product remained extremely limited, with total locked assets collapsing by 72%, from $32 million to $9 million in September. The price of DYDX has fallen by 75% in the last year. Related News: XRP Spot ETF Begins Trading - Makes an Incredible Debut, Here Are the Latest Figures The team interpreted this decline as a clear indication that MegaVault had failed to achieve product-market fit. They also noted that MegaVault was approximately three times more costly to generate liquidity and trading volume than other incentive programs. Therefore, they argued that MegaVault rewards should be reduced from 25% to a range of 0-5% and the product should be restructured. The 75% buyback ratio increase was presented as a strategic step aimed at strengthening the token's economics. The significant pullback in the DYDX price in recent months means that, at current prices, the protocol can only buyback approximately 5% of the total annual supply. The dYdX team noted that increasing buybacks would create a confidence-inspiring signal for the market, recalling that past DeFi protocol buyback announcements were generally received positively by the market, with such announcements leading to an average 13.9 percent outperformance of tokens. *This is not investment advice. Continue Reading: Developers Take Action on Altcoin with Major Price Drop: They’re Initiating Buybacks
