• Staking rewards need to be manually claimed by Stakers on a per-block basis (a block is being produced on the dYdX Chain approximately every 1.08 seconds). Staking rewards can be claimed within the Keplr DYDX dashboard.
• Trading Rewards are denominated in DYDX and are automatically distributed to the eligible dYdX Chain address on a per-block basis. There is no need for traders to wait or to manually claim their DYDX-denominated Trading Rewards.
• DYDX holders who stake DYDX to a Validator can send a transaction to unstake and remove their tokens from being staked to a Validator. After this transaction, the DYDX tokens enter a 30-day unbonding period. During the unbonding period, stakers can choose to re-delegate to a separate validator without having to wait for the unbonding period to elapse. However, a user’s slashing risk with the original Validator remains until the unbonding period concludes. 

It is essential for users to stake their PoS tokens with dependable and highly performant validators, which is why we have rolled out our Staking Rewards Verified Staking Provider (VSP) Program in June 2022. Through this program, we thoroughly scrutinize potential validators, evaluating factors such as security measures, their on-chain reliability, their provider setup, and value-added services for the whole ecosystem.

Our VSP documentation contains further details about the program, Staking Providers that are part of the VSP will have a blue checkmark displayed next to their names here. If you want to know which validators on Cosmos are part of the VSP, simply go to the validator page on Minstcan and click on a validator’s name. If that validator is a verified provider, it will have the Staking Rewards logo shown under ‘Additional information’.

There are many metrics to consider when selecting a validator to delegate to:

Performance: Make sure you pick a validator with the highest possible performance. Further, please check individual validators’ uptime, and our recommendation is only to pick those with a >=99% uptime and a long history of not getting slashed. 

Strong ecosystem contributors: Value-Added Services are extra offerings provided by Staking Providers to improve the staking experience and benefit the community beyond network security. Consider delegating to validators that support protocol development, open-source staking tools, marketing initiatives, and customer support. By offering these services, staking providers can contribute to the growth and development of the broader staking ecosystem.

Commission Rates: The commission rate a validator charges is the % of your reward that the validator keeps for themselves. A high commission rate means your rewards will be lower, whilst a low commission rate could mean that the validator is not profitable and could cause issues for them in the future. Keep in mind that validators can adjust their commission rates up or down over time. The minimum commission rate on dYdX is 5% and the maximum commission rate is 100%.

Number of Users: A high number of delegators could indicate positive sentiment towards a validator. 

Validators Self-Staked balance: A staking provider with a high amount of staked tokens likely has more incentive to continue operating their services as they have more to lose than those with low self-staked balances. This metric has some limitations as Validators can choose to delegate to their own validator from another wallet, which is done to increase security of their funds. 

Current Status: To check if a validator is currently active, go to the dYdX Validator Dashboard on Mintscan. The default view on this page is for “Active” validators, but you can also filter to view inactive validators in the top right corner of the page. Keep in mind that only the top 60 validators on dYdX, ranked by balance, receive rewards.

Network Share: You typically don’t want to choose a validator with the highest or a low network share. Delegating to the most popular validators increases centralisation risks within the network as those validators will have more say in governance and produce a larger share of the blocks. A validator with a low network share might not be profitable, increasing the risk of them discontinuing their services. If a validator drops out of the top 60, they also stop earning rewards. However, if you are willing to put more time in, then delegating to a smaller validator helps support the decentralization of the network. You would just have to make sure to check regularly if the provider is still active and operating.

Staking rewards for DYDX are composed of:

Trading fees: Traders on dYdX pay a taker and maker fee in USDC that differs depending on their trading volume.

Gas fees: DYDX-denominated gas fees from transactions submitted by users on the chain.

Higher trading volume on dYdX will lead directly to higher rewards for stakers.

You are welcome to play around with our DYDX Staking Calculator to get a better feel of how these metrics can influence your rewards.

The dYdX community voted in support of launching a 6-month Launch Incentive Program to distribute ~$20M in DYDX rewards to active users of the dYdX Chain. 80% of rewards will go towards trading activity, while 20% will go towards market maker activity.

Traders will be rewarded based on their overall level of trading activity as measured by trading fees paid. Rewards are paid out over the course of 4 to 5 ‘trading sessions’ with specific amounts of DYDX distributed each season.

You can track the rewards leaderboard here and learn more about the incentive program here.

We strive to make staking as safe and transparent as possible, however, it's important to consider factors that may influence whether a particular staking option is appropriate for you.

Slashing risk: DYDX delegated to a validator can be partially slashed if the validator misbehaves. On top of getting slashed, a validator can also be jailed, during which time you will not be earning any rewards. When a validator double-signs they are removed from the validator set and are permanently unable to join again.

Unbonding risk: When staking DYDX tokens, there is a lockup period of 30 days. This means that investors will not be able to sell their tokens immediately, but instead need to wait 30 days after initiating unbonding before they can be traded again. This is something to keep in mind when deciding to stake, as crypto markets are highly volatile. Consider keeping funds liquid if you do not intend to hold DYDX long-term. 

Dropping out of the active set: A validator could drop out of the top 60 validators, meaning they no longer earn any rewards. Ensure you check back frequently to ensure your validator is active, not jailed and has not unreasonably raised their commission fees. 

Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs, this risk applies not only to staking but also the investment in DYDX.

Please note that this is not an exhaustive list of all the risks related to staking.

DYDX is the native token of the dYdX network that is used to carry out the key functions of the platform as detailed below:

Token Utilities:

Governance: DYDX is used to vote on governance proposals on the network. Only staked tokens are eligible to be used for governance voting. The amount of voting power is measured in terms of stake. Validators inherit the voting weight of their Stakers unless a given Staker decides to vote on a proposal themselves. 

Staking: Users can temporarily lock up DYDX to contribute to the security of the dYdX network.

Gas token: Each transaction processed by the network requires a small fee in DYDX to be paid to the validator. 

dYdX is powered by CometBFT. CometBFT is a fork of, and a successor to, Tendermint Core, and will serve as the official replication engine powering the Interchain Stack. It offers instant finality, is horizontally scalable and is secure against malicious actors. It is also open-source, meaning anyone can inspect and use the code. Additionally, it is simple to set up and use, allowing developers to quickly and easily build distributed applications. The active validator set consists of the 60 highest-ranked validators by staked tokens, from which 1 validator is randomly selected to propose a block with 66% of the remaining active validators being required to attest the block in order for it to become final. The higher the stake, the more likely they are to be selected.

1 billion DYDX tokens have been created, with their availability set to span over five years, beginning on August 3rd, 2021. The governance may opt to use a continual inflation rate of up to 2% annually to augment the DYDX supply. This is to guarantee that the community possesses sufficient resources for the ongoing development and expansion of the Protocol. Any implementation of inflation is subject to approval through a governance proposal and is limited to a maximum of 2% per year.

Initial token distribution:

The Initial token distribution of DYDX is as follows:

27.7% is allocated to Investors

14.5% is allocated to User Trading Rewards

15.3% is allocated to Employees and Consultants of dYdX Trading or Foundation

5.0% is allocated to Retroactive Rewards

5.2% is allocated to Liquidity Provider Rewards

7.0% is allocated to Future Employees & Consultants of dYdX Trading or Foundation

24.2% is allocated to Community Treasury

0.6% is allocated to Liquidity Staking Pool

0.5% is allocated to Safety Staking Pool