The rise in trading activity on the platform is said to be the driving force behind this change. The proposal received approval on April 6, with 91.7% of the vote supporting it.
Due to increased activity on the dYdX decentralized crypto exchange (DEX), the community has chosen to stake 20 million DYDX tokens to enhance security measures.
Enhanced Security Measures Approved for dYdX Exchange
Staking tokens from the community treasury, currently valued at over $61 million, using the liquid staking protocol Stride, was officially approved on April 6, with an overwhelming 91.7% of the vote in favor. The decision to implement these measures comes in response to the surge in trading activity observed on the dYdX protocol.
According to dYdX, the increase in trading activity on the protocol has prompted the community to take action. The team noted that while the rate of DYDX being staked to validators has stabilized, deposits to the exchange are growing rapidly. Over the past week alone, approximately $100 million has been deposited into dYdX v4, bringing the total held in the exchange to over $140 million in USDC.
Protecting the dYdX Network: Staking for Security
Staking native tokens is a key strategy employed by the DEX to safeguard its network against potential 51% assault-style control attempts. This type of attack occurs when an adversary gains significant hashing power over a blockchain, enabling them to influence the network’s operations. Decentralizing voting power is crucial for preventing such assaults.
dYdX emphasizes that its network architecture is designed to mitigate risks associated with potential attacks. For instance, even with just a third of the voting power, an adversary could disrupt on-chain activities. If these individuals control two-thirds of the voting power, they could potentially exploit the funds of the dYdX Chain community and its users.
The stablecoin USDC is utilized to store staking rewards on dYdX, which are generated from the fees users pay while trading on the platform. Through Stride’s methodology, DYDX stakes may increase automatically over time due to the compounding nature of rewards. Moreover, the dYdX community plans to allocate 7.5% of the staked position to cover the expenses associated with the staking service.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
Join Cryptos Headlines Community
Follow Cryptos Headlines on Google News
Author
