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.

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dYdX

# dYdX P/S ratio (circulating) Methodology

## 1. Overview

The circulating P/S ratio for dYdX measures the relationship between the protocol's market valuation and its revenue generation capability. It is calculated by dividing the annualized revenue by the circulating market capitalization. This metric helps assess whether the protocol is overvalued or undervalued relative to its revenue-generating performance. The calculation accounts for dYdX's evolution from a StarkEx-based dYdX V3 protocol to the native dYdX Chain dYdX V4, including a token migration that occurred in January 2024.

## 2. Data sources

The methodology relies on several key data sources:

- **dYdX Chain transaction records**: Native blockchain transaction data including transaction fees and tips paid on dYdX Chain
- **dYdX Chain message events**: Parsed `match` events from dYdX dYdX V4 protocol containing maker and taker fee data in USDC quantums
- **dYdX API trading data**: Historical hourly trading fee data from the dYdX API covering the dYdX V3 StarkEx period
- **Manual fee data**: Hardcoded daily fee amounts provided directly by the dYdX team for early 2023 periods
- **Legacy revenue data**: Historical revenue data synced via Fivetran for validation and completeness
- **CoinGecko daily market data**: End-of-day market capitalization data for both the legacy DYDX token and the new dYdX Chain token
- **End-of-day price feeds**: Token price data from CoinGecko for USD conversion of native chain fees

## 3. Step-by-step calculation

### Component A: Revenue aggregation from multiple sources

- **Purpose**: Calculate total daily protocol revenue by combining fees from all dYdX protocol versions and time periods
- **Logic**: The calculation combines five distinct fee sources to create a comprehensive revenue history. Manual fee data covers early 2023 with hardcoded daily amounts provided by the dYdX team. API trading fees provide hourly data that gets aggregated to daily snapshots, selecting fees at UTC hours 0, 1, or 2 to capture 24-hour rolling totals. Legacy revenue data from Fivetran provides historical validation. dYdX Chain transaction fees sum all transaction fees and tips from native blockchain activity, converting from native tokens to USD using end-of-day price feeds. dYdX V4 match events extract maker and taker fees from parsed `match` events, with fees already denominated in USDC quantums that convert directly to USD by dividing by 10^6
- **Key fields**: `fee_amount` from various sources, `transaction_fee` and `transaction_tip` from chain data, `taker_order_fee_raw` and `maker_order_fee_raw` from match events, `timestamp` for daily aggregation

### Component B: Market capitalization with token transition

- **Purpose**: Calculate daily circulating market capitalization accounting for the token migration from Ethereum to dYdX Chain
- **Logic**: Market cap data comes from CoinGecko daily market data with a critical transition point at January 15, 2024. Before this date, the calculation uses market cap data for the 'dydx' token (the original Ethereum-based DYDX token). After this date, it switches to the 'dydx-chain' token data, reflecting the migration to the native dYdX Chain token. This ensures continuity across the protocol's evolution while using the appropriate token for each time period
- **Key fields**: `market_cap` from CoinGecko data, `coingecko_id` to distinguish between token types, `daily_timestamp` for temporal alignment

### Component C: Fee source coordination and deduplication

- **Purpose**: Ensure proper temporal coverage across different fee sources without double-counting
- **Logic**: Different fee sources cover distinct time periods and protocol versions. Manual fees cover early 2023 when API data was unreliable. API trades cover the dYdX V3 StarkEx period with hourly granularity converted to daily. Chain transaction fees cover native dYdX Chain activity. dYdX V4 match fees specifically capture decentralized trading fees. Legacy revenues provide backup validation. The combination logic prioritizes manual overrides where available, then combines non-overlapping sources by protocol version and time period
- **Key fields**: `product_id` for version identification (dYdX V3, dYdX V4, blockchain), `chain_id` for protocol distinction (starkex, dydx), `timestamp` for temporal coordination

### Final aggregation

- **Combining components**: Revenue sources are unioned together with proper chain and product identification, then aggregated daily by summing all fee types. Market cap uses the appropriate token based on the date. Both metrics are aligned to daily timestamps and filled with zeros for missing values
- **Currency conversion**: Chain transaction fees convert to USD using end-of-day CoinGecko price feeds. dYdX V4 fees are already in USDC and convert directly. API and manual fees are assumed to be in USD
- **Time aggregation**: All data aligns to daily boundaries using timestamp truncation. Revenue aggregates by summing within each day. Market cap uses the daily closing values
- **Final calculation**: The P/S ratio divides annualized revenue by circulating market cap. Annualized revenue equals daily revenue multiplied by 365. Missing values are filled with zeros to maintain time series continuity

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

${market_cap_circulating} / (rolling_avg(${revenue}, 30) * 365)

Circulating market cap relative to annualized revenue.

dYdXDYDX

P/S ratio (circulating)

P/S ratio (circulating)

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