DYDX, the native token of the newly-released dYdX chain, has risen by more than 20% in the past 24 hours, just 16 days before more than $500 million worth of tokens will be unlocked to early investors and core team members.
Over the past 30 days, DYDX has more than doubled in price as speculators anticipated the token's migration from Ethereum to the dYdX chain. However, a large token unlock in just over two weeks has the potential to damp spirits. There are 179 million DYDX tokens in circulation, and the upcoming unlock will increase that to 395 million, according to token.unlocks.
The unlock was meant to take place in January this year, but was shelved until December, a decision that spurred an initial price hike earlier this year.
Research published earlier this year from The Tie reveals that large token unlocks lead to a decline in price as demand for the asset can't keep pace with the increase in supply, known as inflation.
DYdX CEO Antonio Juliano has attempted to remedy that by incentivizing staking, a method that involves locking tokens on a blockchain to receive rewards. Juliano revealed on Tuesday that stakers will receive "cold hard USDC," for staking and that validators will receive 100% of trading fees. USDC is a dollar-pegged stablecoin.
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