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Users Celebrate Massive DYDX Token Airdrop as Transfer Restrictions Lift

Traders celebrated the latest big-budget airdrop, but there have been some stumbles for DYDX out of the gate due to a reported bug with the safety module.

Sep 8, 2021 at 5:20 p.m. UTC
Updated Sep 8, 2021 at 6:55 p.m. UTC

Crypto derivatives exchange dYdX lifted transfer restrictions on its DYDX token on Wednesday, allowing users to claim a retroactive airdrop and trade the tokens. The token currently sits at a market cap of $650 million and a fully diluted valuation of $11.68 billion just hours after launch.

  • dYdX is a decentralized exchange built on the Starkware layer 2 network that features an order book architecture in contrast to automated market makers such as Uniswap or SushiSwap. Users can trade in spot, perpetual futures and margin markets on multiple trading pairs.
  • The DYDX token is a governance and utility token. DYDX can be used to vote on governance proposals, and it also confers trading fee and market making fee reductions proportional to DYDX holdings.
  • In the hours since trading unlocked, the token price had been extremely volatile. Crypto asset tracking website CoinGecko showed the DYDX price launched as high as $14, and there is a significant spread between centralized and decentralized exchanges. At the time of writing, the price on OKEx sits at $13.71, while Sushi’s DYDX/ETH pool prices the token at the equivalent of $11.71.
  • Reports from Twitter indicate that some users received airdrops worth over $50,000. Eligibility required trading on the exchange in the last three years. CoinDesk has reached out to the dYdX team to confirm the median airdrop amount, but they did not respond by press time.
  • Users who traded using an IP address within the United States are not eligible for the airdrop or participation in the staking program, apparently due to concerns about securities laws. This has caused significant consternation on Twitter.
  • Users outside of the United States can earn tokens through a variety of liquidity mining programs currently underway. Trades placed on the exchange will earn tokens, and there are also liquidity provision and security module staking rewards planned.
  • On Twitter, users have reported the front end for the security module staking contract has been disabled, as users have not been receiving staked DYDX tokens (stkDYDX) to represent their share of the insurance pool.
  • “No user funds are at risk, and all funds are recoverable,” wrote a team member on the exchange’s official Discord.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Andrew Thurman is a tech reporter at CoinDesk with a focus on DeFi.

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