This is the 15th edition of the dYdX Epoch Review, presenting updates from the dYdX community and ecosystem. To learn more, join us on Discord, Twitter, and the Community Forums.

A summarized deck containing all the highlights of Epoch 14 can be found here. You can check out the highlights in this video as well.

Key Metrics

Performance Indicators

For Epoch 14 (August 30, 2022 15:00 UTC - September 27, 2022 15:00 UTC). No addresses were identified as wash trading during Epoch 14.

Trading Rewards

3,835,616 $DYDX were earned over the course of Epoch 14 and will be distributed to 2,778 traders. This is a decrease from Epoch 13 where 3,292 traders were eligible for trading rewards. The on-chain DIP from Wintermute to reduce trading rewards by 25% from 3,835,616 $DYDX to 2,876,712 $DYDX passed with 24M $DYDX (99.92%) from 99 addresses voting in support, as opposed to 19K $DYDX (0.08%) from 15 addresses voting against the change. The change will take immediate effect in Epoch 15 once it has been executed.

Source: Metabase Community Dashboard

At the start of Epoch 14, the trading rewards formula was simplified to w=f. Learn more about the trading rewards program in our documentation, or our blog posts.

Liquidity Provider Rewards

Liquidity Provider (“LP”) Rewards: 1,150,685 $DYDX were earned over the course of Epoch 14 and will be distributed to 53 addresses who were eligible for LP rewards in Epoch 13. Competition in the pool decreased slightly compared to the previous epoch where 58 addresses were eligible.

Source: Liquidity Provider Rewards Dashboard

Market makers meeting the 0.25% threshold in Epoch 14 are now eligible to earn rewards in Epoch 15. 70 addresses (41 existing and 29 new) did more than =>0.25% of maker volume in Epoch 14. Learn more about the LP Rewards in our documentation, or our blog posts.

Source: Metabase Community Dashboard

Liquidity Module

$106M $USDC from 637 users was staked to the Liquidity Staking Pool. This is a decrease from the $111.2M $USDC staked in Epoch 13. Only $69M $USDC is actively staked and earning rewards. This can be attributed to the successful on-chain DIP to effectively wind down the Liquidity Module by setting rewards per second for staking $USDC to 0..  65 users requested to withdraw before the Blackout Period in Epoch 14. These inactive USDC funds can now be withdrawn and are no longer earning $DYDX rewards.

Source: Ethercan

Three market makers have borrowed $22M $USDC from the staking pool. 2 market makers borrowed $110K, while one market maker has borrowed $22M $USDC. Learn more about the Liquidity Module in our documentation, or our blog posts.

Source: Dune

Safety Module

$37.1M $DYDX from 4,372 users was staked to the Safety Module. This is a decrease from Epoch 13 where 38.7M $DYDX was staked. The top 2 stakers account for over 31% of staked $DYDX.

209 users requested to withdraw before the Blackout Period in Epoch 14. Requests to withdraw were relatively consistent with the 281 users requesting withdrawals before the Blackout Period in Epoch 13. These inactive $DYDX funds can now be withdrawn and are no longer earning $DYDX rewards. Users must request to withdraw their funds before the Epoch 15 Blackout Window (first 14 days of the epoch) to withdraw their funds starting in Epoch 16. Learn more about the Safety Module in our documentation, or our blog posts.

Source: Etherscan

Community Treasury

Approximately 766,703 $DYDX vested in the Community Treasury over the course of Epoch 14. The Community Treasury now holds 36,191,348 vested $DYDX tokens. In Epoch 5, Reverie officially launched the dYdX Grants Program (“DGP”) with 752,000 $DYDX transferred from the Community Treasury to the Grants Committee multi-sig. On August 7,the dYdX community unanimously voted in favor of transferring an additional 2,582,000 $DYDX to the dYdX Grants multi-sig to launch DGP v1.5. Learn more about the community treasury in our documentation.

Circulating Supply

13.9% of the total $DYDX supply (excluding unearned Retroactive Rewards transferred to the Treasury and the $DYDX vested in the Community Treasury) is considered liquid at the end of Epoch 14. Learn more about the $DYDX allocation in our documentation.

dYdX Governance

On-chain DIP

Reduction of Trading Rewards by 25%

On September 26, the on-chain DIP to reduce trading rewards by 25% from 3,835,616 $DYDX to 2,876,712 $DYDX was created by Wintermute. This is the 2nd component of the trading rewards simplification that SLN Capital  proposed on July 28, 2022.  The vote passed with 24M $DYDX (99.92%) from 99 addresses voting in support to reduce rewards by 25%, as opposed to19K $DYDX (0.08%) from 15 addresses voting against the change. The change will take immediate effect in Epoch 15 once it has been executed. The excess $DYDX (958,904 $DYDX per epoch) that accrues in the Rewards Treasury can be used/directed by the dYdX community with a governance vote (Short Timelock).

Winding down the Liquidity Module

On September 21, the on-chain DIP to effectively wind down the liquidity module passed with near unanimous consent from the dYdX community. 26.5M $DYDX from 99 addresses voted in support to wind down the liquidity module. The rewards associated with $stkUSDC have been set to zero, and the blackout period has been decreased to 3 days. Stakers must request to unstake $USDC at least 3 days before the current epoch ends in order to be able to withdraw their USDC in the next epoch. If stakers do not request to withdraw, their staked USDC is rolled over into the next epoch.

Off-chain DIPs

A Further Step Towards More Equitable LP Rewards

On September 27, SLN Capital posted an off-chain DIP following up on the snapshot to revise the LP rewards formula with the follow changes:

• Change the weights for non BTC/ETH markets to v = 0.6, d = 0.35, and s = 0.05.
• Change the weights for BTC/ETH markets to v= 0.8, d = 0.15, s = 0.05.
• Reduce the rewards paid for BTC/ETH to 10%/10% rather than 20%/20%.

The formula revision is effective at the start of Epoch 15 (September 27th, at 15:00 UTC). The LP Rewards documentation has also been updated to reflect these changes.

Snapshot Polls

Ambassador Program Continuation

On September 11, the snapshot on the continuation of the Ambassador Program for a second Season (September 1 - November 31) concluded. Despite a majority of the dYdX community voting in favor (65.5%) of  continuing the ambassador program, the minimum vote differential of 67% under the minimum requirements for binding snapshot votes was not met. As such, the program will not be continuing in its current capacity for Season 2. This commonwealth thread captures a comprehensive list of all resources and contributions which ambassadors have created.

Forum Discussions

• Add agEUR on dYdX: Angle Protocol posted a DRC to add agEUR to the dYdX exchange. agEUR is an ERC20 token backed by reserves composed of $USDC, DAI, FRAX, LUSD, WETH, and WBTC on the Ethereum mainnet. agEUR is a decentralized and over-collateralized ( ~197%) stablecoin available on 12 different blockchains, issued and managed through the Angle Protocol. The average daily trading volume is at $3M, total supply is at $42M, and total value locked is $75M. A long-term synergy could be found in Angle Protocol opening shorts on dYdX to ensure hedging of the protocol reserves, similar to the short trading made by UXD Protocol on Mango in order to ensure a delta-neutral position.
• Partner with Anchorage to lend out $DYDX to Market Makers: Anchorage posted a DRC to spur discussions on launching a program which allows Anchorage Lending to lend out $DYDX from the community treasury to qualified, institutional 3rd party liquidity providers (Market Makers) to generate interest and increase activity on the dYdX platform. To address concerns and questions about the proposal from the community, the dYdX Foundation will be hosting a Twitter Spaces AMA with the Anchorage team on October 6th, Thursday at 21:00 UTC.
• Add BiLira (TRYB) on dYdX: BiLira posted a DRC to add BiLira (TRYB) to the dYdX exchange. TRYB is a Turkish Lira backed stablecoin, and will be the largest non-dollar stablecoin on dYdX from an emerging country. Onboarding BiLira will allow Turkish users to trade on dYdX with only a domestic bank transfer. With over 40 exchanges operating in Turkey, the Middle East’s largest economy and home to around 85M people, the adoption of cryptocurrencies is ever expanding. TRYB tokens are backed 1:1 with TRY fiat reserves, and BiLira (1 TRYB) is always supported by one unit of the reserve currency (1 TRY). Moving the dYdX Borrower Pool to TrueFi: On September 10, TrueFi updated their DRC post to create a dYdX borrower pool on TrueFi. The potential benefits of this proposal include:
• ///Higher utilization of funds and improved liquidity.///
• ///Use $DYDX token emissions to allocate capital to the most productive market makers.///
• This updated post explains the specifics of the proposal. TrueFi is proposing a 4-month trial of lines of credit for up to 20 individual borrowers. TrueFi plans to operate the trial with 1.26M $DYDX tokens from the dYdX Community Treasury to support this initiative as a subsidy to the real interest rate the borrowers pay.
• Epoch 14 ended on September 27 at 15:00 UTC. Epoch 14 rewards will be claimable here on October 4, at 21:51 UTC (7 days after the end of the epoch plus a 7 hour delay). Once tokens have been claimed, they can be transferred, staked to the Safety module, or delegated to dYdX governance.

What’s Next?

• Epoch 14 has ended. Welcome to Epoch 15! Epoch 15 started automatically on September 27 at 15:00 UTC and will end on October 25 at 15:00 UTC.
• The Merkle root was proposed on-chain on September 27 at 21:51 UTC and the 7-day waiting period has begun. Epoch 14 rewards will be claimable here on October 4, at 21:51 UTC (7 days after the end of the epoch plus a 7 hour delay). Once tokens have been claimed, they can be transferred, staked to the Safety module, or delegated to dYdX governance.
• The Merkle tree data, which is a list of (address, reward) pairs, is available here. Under the hood, the Merkle Distributor smart contract (0x01d3348601968aB85b4bb028979006eac235a588) will distribute $DYDX token rewards according to a Merkle tree of balances.

dYdX Ecosystem

DGP update:

In the second round of funding since the on-chain vote for DGP v1.5 passed, the DGP has approved 8 grants with $166,150 for a total of $497,650 in funding. New grants include:

• An Academy Page Website Manager,
• Copy Trading Platform Testnet Competition,
• A string of social media announcement videos for dYdX grants,
• A retroactive merchandise grant,
• A Trading Fees Optimization Research,
• Academy Page POAPs,
• A series of Metagals Workshops, and
• A Merchandise Webstore + Branding grant.

Delegation:

See the full list of Endorsed Delegates here. In addition, the governance burrow started a ‘Meet the Delegates’ series, where delegates were introduced and asked questions by the community. Read about the summary of the first, second and third episodes. If you hold $DYDX and/or $stkDYDX but have no time to review proposals, consider delegating the proposing power and/or voting power of your $DYDX and/or $stkDYDX to one of the 21 Endorsed Delegates.

Hedgies allocation

dYdX Foundation announced that 9 out of the dYdX Foundation’s 205 Hedgies have found new homes with dYdX community members! Read more about it here.

dYdX Trading Updates

• On September 24, dYdX Trading identified malicious versions published to a number of dYdX NPM packages that were quickly removed. All funds are safe, the website and application is not compromised, and the attack did not impact smart contracts. Read more about this here.
• On September 12, dYdX Trading announced that the staging testnet will be migrated from Ropsten to Goerli. Accounts, balances and position will not be migrated, and this does not affect the exchange running on Ethereum’s mainnet. Read more about the announcement here.
• On September 9, dYdX Trading announced that starting Season 34 on September 13, 2022, USDC rewards will no longer be included in the Trading Leagues prize pool. Trading Leagues will still remain available for all users as will the distribution of Hedgie prizes. Read more here.
• On September 1, dYdX Trading chatted with Dan Matuszewski, the founder of CMS Holdings on episode 3 of the Depth and Spread Podcast. Check out the blog post here.
• On August 30, dYdX Trading announced an update of the compliance settings to block less than 0.1% of wallets connected to the exchange which had interacted with Tornado Cash, which was recently added to the U.S. Treasury’s sanctions list. If you believe your account remains incorrectly blocked, please reach out to support@dydx.exchange.

New Features

• On September 14, dYdX announced that charting support like position size, average entry price, order type, size and prices are now supported on the exchange. Check out the announcement here.
• On September 6, the BitKeep wallet was added to the dYdX exchange. Check out the announcement here.
• Want to transfer $USDC between accounts without paying gas fees? Read more about the create_transfer API here.
• Gasless deposits are live. The minimum threshold is $500 USDC for your first deposit and $1,000 USDC for subsequent deposits. Read more about it here.
• Want to practice your trades with no risk? Head here and practice today!
• To increase responsiveness about language and localization issues, dYdX Trading Inc. and dYdX Foundation created the 🌎#┃issue-reporting channel on Discord.
• Check out Hedgie Displays - animated derivative NFTs to be used for physical video displays by only the owner of the respective Hedgies NFT.

Social

• On September 29, in collaboration with Pyth network, dYdX Trading organized an after-party in #TOKEN2049 Singapore.
• On September 20, dYdX hosted a chat with Jordi Alexander, CIO of Selini Capital about a variety of mechanism and incentive engineering questions. Check out the chat here.
• Want to learn more about dYdX, DeFi, and much more? Check out the dYdX Academy and watch for updates at 🎓┃dydx-academy on Discord.
• Looking for more information about the dYdX ecosystem? Check out the dYdX DAO info docs here.
• Make sure you RSVP to the following events: Hedgie Huddle, and the Epoch 14 Review and AMA.