Market makers offer trades through order book & make money on bid-ask spreads (supply-side fees).

dYdX is a non-custodial trading and derivatives protocol initially built on Ethereum and later expanded to their own blcokchain built on top of the Cosmos SDK. dYdX was founded by Antonio Juliano and launched in 2017.

DYDX tokenholders own and govern the protocol. dYdX Trading Inc. currently takes all of the total trading fees paid by traders (revenue). dYdX’s investors include a16z, Polychain, The Spartan Group, etc.

governance

github

twitter

discord

etherscan

website

Derivative exchanges

dYdX

# dYdX Expenses Methodology

## 1. Overview

The dYdX expenses metric measures the total USD value of token incentives paid out by the protocol across both its Ethereum-based DEX operations and dYdX Chain blockchain operations. This metric captures the protocol's operational costs in the form of rewards and incentives distributed to users and stakeholders, providing insight into the protocol's spending on user acquisition and retention.

## 2. Data sources

The calculation draws from several raw data sources:
- **Ethereum smart contract events**: Parsed event logs from dYdX v1 protocol contracts including `LiquidityStaking_ClaimedRewards`, `SafetyModuleV2_ClaimedRewards`, and `MerkleDistributor_RewardsClaimed` events
- **dYdX Chain blockchain events**: Native blockchain event logs, specifically `coin_spent` events from the community treasury
- **Token transaction data**: DYDX token transfer and reward claim data on Ethereum
- **End-of-day price feeds**: Token pricing data from CoinGecko for both DYDX token and dYdX Chain native token conversion to USD
- **Token metadata**: Token contract addresses, decimal configurations, and denomination mappings

## 3. Step-by-step calculation

### Component A: DEX token incentives from Ethereum
- **Purpose**: Tracks DYDX token rewards claimed by users from Ethereum-based dYdX v1 protocol contracts
- **Logic**: Extracts reward claim events from three contract types - liquidity staking rewards, safety module rewards, and merkle distributor rewards. Filters out claims made by the community treasury address to avoid double-counting unclaimed rewards that are returned to the treasury. Identifies all events involving the DYDX token address and extracts the claimed reward amounts
- **Key fields**: `claimedRewards` amounts from events, `account` addresses to identify claimants, `token_address` for DYDX token verification, and `block_timestamp` for daily aggregation

### Component B: Chain token incentives from dYdX Chain
- **Purpose**: Tracks native token incentives distributed by the dYdX Chain community treasury
- **Logic**: Identifies `coin_spent` events where the spender is the community treasury address. Uses regex pattern matching to extract token amounts from JSON-formatted event attributes, specifically looking for amounts denominated in 'adydx'. Filters events to ensure they represent legitimate treasury distributions rather than other transaction types
- **Key fields**: `amount` extracted from event attributes, `spender` address verification, and token denomination validation through regex patterns

### Final aggregation
- **Combining components**: Both DEX and Chain token incentives are aggregated daily by timestamp and summed together to create total protocol expenses
- **Currency conversion**: DEX incentives are converted from wei to DYDX tokens then to USD using end-of-day DYDX price feeds. Chain incentives are converted from micro-units (adydx) to full units by dividing by 10^18, then converted to USD using dYdX Chain token prices from CoinGecko
- **Time aggregation**: All data is truncated to daily boundaries and aggregated by day to provide consistent daily expense measurements
- **Final calculation**: The metric represents the sum of all token incentives paid across both Ethereum DEX operations and dYdX Chain operations, converted to USD and aggregated daily, representing the protocol's total expenses in the form of user rewards and incentives

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total project operating and incentive expenses.

dYdXDYDX

Expenses

Expenses

Competitive landscape

Chain breakdown