dYdX Chain Launch Incentives Program Powered by Chaos Labs: Seasons 5 & 6 Extension

dYdX Foundation
Jun 7, 2024

TL;DR

  • The dYdX Chain’s 6-month Launch Incentives Program allocated $20 million in DYDX to dYdX Chain users, which increased trading volume, TVL, and active traders over 4 seasons. Over the same time period, the dYdX Chain collected $24.7M in fees. 
  • On June 7, 2024, the dYdX community voted in favor of distributing $5 million in DYDX under Season 4 of the Launch Incentives Program to 4,142 unique addresses on the dYdX Chain.
  • On April 28, 2024, the dYdX community voted to extend the Launch Incentives Program for two additional seasons with an additional budget of $10 million in DYDX rewards.
  • Seasons 5 is currently live and introduces three key innovations: (1) a multiplier for DYDX stakers to earn up to 50% more points, (2) a 1.5x points multiplier for trades placed via web or mobile apps, and (3) a 2x multiplier for trading in non-major markets to enhance liquidity.
  • Additionally, new enhancements include a first deposit bonus for new accounts, continuation of trading leagues with a $800,000 prize pool, and $1 million in rewards for market makers who significantly contribute to trading volume, especially in less liquid markets.

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Seasons 1 to 4 Highlights

On November 28, 2023, the dYdX community approved the 6-month Launch Incentives Program proposed by Chaos Labs, which allocated $20 million in DYDX to incentivize early adopters of the dYdX Chain and ensure a smooth transition from dYdX V3 to the dYdX Chain. 

Based on the reports published by Chaos Labs, the Launch Incentives Program has been successful throughout seasons 1-4 in driving user adoption and trading volume on the dYdX Chain. 

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Season 1 to 4 Metrics

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Launch Incentives Program Extension

On April 28, 2024, the dYdX Community voted in favor of extending the Launch Incentives Program for an additional three months, covering two more trading seasons, with an extra allocation of $10 million in DYDX from the dYdX Chain Community Treasury.

Chaos Labs’ report highlights that the Launch Incentives Program successfully drove substantial growth on the dYdX Chain during seasons 1-4. Trading fees collected by the protocol exceeded program costs by $4.7 million, indicating sustained trading activity and long-term engagement within the dYdX ecosystem.

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Seasons 5 and 6 Updates

Season 5 is already live! Details are provided here.

Season 5 will follow a similar structure to previous seasons, spanning 6-8 weeks, and ending sometime between July 7 and 17, 2024.

Three innovations have been introduced for these new seasons to align incentives with long-term valuable activities on the dYdX Chain:

  1. Multiplier for DYDX Stakers: DYDX stakers, including those with Liquid Staking Tokens (stDYDX from Stride and stkDYDX from pStake), will earn up to 50% more points, calculated based on the average staked amount over the season. This initiative recognizes the higher retention and long-term value DYDX stakers bring to the ecosystem.
  2. Multiplier for Front-End Activity: Trades placed via the web, iOS, or Android apps will receive a 1.5x points multiplier, retroactively applied at the season's end. This change encourages human-executed trading activity and enhances user engagement.
  3. Separate Trading Reward Allocations: A 2x multiplier on points will be applied to activity in non-major markets (excluding BTC, ETH, and SOL), promoting liquidity in these markets. This approach supports the growth of long-tail markets and encourages diverse trading activity.

In addition to the above, key enhancements have been made to the existing reward structure:

  1. New Deposit Bonus: The first deposit bonus of $100 will only be available to the first 1,000 new accounts with the highest taker volume.
  2. Trading Leagues: Due to positive feedback, trading leagues will continue in their current format, with $800,000 allocated for prizes. 
  3. Market Maker Rewards: Recognizing the critical role of liquidity, $1 million will be awarded to market makers who contribute more than 0.25% of maker volume. Rewards will be based on contributions to trading volume, especially in less liquid markets and during periods of volatility. The detailed formula for reward calculation can be found in the supplemental LP reward formula provided by Chaos Labs.

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Chaos Labs Resources

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