DeFi derivatives platform dYdX is unlocking allocations on its DYDX governance token for users today, allowing those who received the initial airdrop to withdraw and trade their allotted tokens.

Although the token itself was announced and launched in early August, tokens have been locked for the first platform Epoch, plus a week-long cooldown period before withdrawals are enabled.

About dYdX

dYdX has a longer history than most platforms in the DeFi space, launching in 2017 as one of the first (if not the first) decentralized margin trading platform on Ethereum. The platform launched perpetual futures trading on Ethereum in 2020 and expanded this offering to Layer-2 scaling solution StarkWare early this year, where it has garnered more attention.

Despite a quiet few years, dYdX has backing from extremely notable names, including Coinbase co-founder and CEO Brain Armstrong, Andreessen Horowitz and Three Arrows Capital.

The DYDX token

dYdX’s silent few years may have been due to its peers launching governance tokens and incentive programs, while remaining tokenless itself. This changed on August 3rd of this year, upon the announcement of the DYDX token.

DYDX tokens will have two primary uses:

  1. Governance power for steering the future direction of the dYdX platform; and
  2. Earning discounts on trading fees within the platform.

Additionally, active traders on dYdX will be able to earn DYDX tokens via trading rewards and liquidity provision.

Around 50 million tokens are set to be unlocked today, out of a total of one billion tokens. These 50 million DYDX tokens were airdropped exclusively to previous users of the platform, who also had to actively trade on the dYdX StarkWare perpetual futures platform to claim their allocation.

Investors still must wait an additional 18 months to access their own tokens.

The competition

dYdX’s closest competitor is most likely Perpetual Protocol, whose PERP token currently has a circulating market cap of slightly under $1 billion, or $3.2 billion fully diluted. dYdX already has more than 26 times Perpetual Protocol’s total value locked (TVL), and more than 2.5 times the trading volume over the last twenty-four hours.

Aside from Perpetual Protocol, dYdX may also take a bite out of the centralized futures market. Binance Futures recently locked out users across several European countries, while others like FTX and BitMEX, may witness an increasing percentage of users switch to decentralized alternatives with different risk and anonymity profiles.