Decentralized cryptocurrency exchange dYdX has postponed plans to unlock nearly $300 million worth of dYdX tokens for investors, extending the lockup period from February to December.
Since the news broke, DYDX is up 24% on the day.
Extension of the blocking period
What Announced Per dYdX on Wednesday, the dYdX foundation, dYdX trading, and the parties to the collateral for the purchase of DYDX tokens signed an amendment to extend the transfer restriction schedule for such tokens. This included pushing back its initial release date from February 3 to December 1.
“The aforementioned order amendment does not alter the staggered unlock that occurs after the initial unlock date,” the foundation clarified.
The dYdX Foundation is a Swiss non-profit organization formed to fuel the growth of the dYdX ecosystem and protocol communities. The protocol itself is governed by holders of DYDX, a governance token that simultaneously offers holders rewards through tokens and trading fee discounts.
At present, only about 15% of the total supply of 1 billion DYDX tokens has entered circulation. The initial token allocation in August 2021 was partially reserved for investors in dYdX Trading, as well as current and future employees, founders, and consultants of the company.
Going forward, the next token unlock will include a 30% unlock on December 1, followed by a 40% unlock within the first 6 months of 2024.
The first of every month for the next 12 months will cumulatively unlock another 20% of tokens, while the next 12 months will unlock the final 10% of tokens. That means all dYdX unlocks will be complete by June 1, 2026.
dYdX pump
dYdX started trading at $1.56 on Wednesday, before shooting above $2.00 at 11:25 ET. It is now trading at $1.93, up about 25% on the day.
The initially planned launch, scheduled for next week, would have unlocked 156 million dYdX tokens. Cumulatively, that’s $243 million worth of tokens based on Wednesday’s starting price and $301 million based on their current price.
dYDX was one of the few tokens to benefit from FTX’s November crash, rising 50% a week after it filed for bankruptcy. The exchange prides itself on being custodial-free, thus eliminating the counterparty risk associated with similar centralized exchange failures.
However, those behind the protocol have confessed to blocking addresses linked to Ethereum’s privacy tool Tornado Cash in the application of the Treasury Department.
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