Switzerland-based dYdX Foundation, the supporting entity behind the decentralized crypto exchange dYdX, has requested $30 million from the project’s decentralized autonomous organization (DAO). The requested funds are intended to be allocated for the next three years. This proposal aims to bolster the development and expansion of dYdX into what the Foundation envisions as “the exchange layer of the internet.”
Foundation’s vision and budget breakdown
The dYdX Foundation, which provides crucial support in legal, research and development, marketing, and technical assistance for the dYdX crypto trading project, has put forth an ambitious vision for the future.
Their ultimate goal is to transform dYdX into a pivotal component of the digital exchange landscape. If approved by the DAO’s tokenholders, the funding request would allocate 4% of the current treasury to the Foundation over three years.
Payroll: Approximately 50% of the requested budget would be dedicated to payroll expenses. This funding would ensure the continued growth of the dYdX team, enabling them to drive innovation and maintain the platform’s operational excellence.
Marketing and Growth: A significant portion, 18%, of the funds would be channeled towards marketing and growth initiatives. This allocation underscores the Foundation’s commitment to expanding the user base and enhancing the platform’s reach.
Legal Disbursements: Legal matters account for 14% of the proposed budget. This includes expenses related to compliance, regulatory issues, and any necessary legal support.
Contractors: Around 5.5% of the requested funds would be allocated to contractors, who play a crucial role in the project’s development and operation.
Commitment to responsible money management
In a forum post addressing the proposal, the dYdX Foundation emphasized its commitment to responsible financial management, highlighting its focus on “capital preservation” strategies to mitigate risk. To this end, the Foundation diversified its holdings from USDC to treasury bonds in response to the stablecoin de-pegging during a banking crisis in March. While transitioning away from cryptocurrency assets, this move contributed to reduced risk exposure and yielded substantial returns.
Additionally, the Foundation plans to diversify some of the requested funds into fiat currency and stablecoins. Furthermore, they intend to invest in expanding their staking operations, which currently generate staking yield on 2.5 million dYdX tokens.
The injection of $30 million into their operational budget would comprise 10.5 million DYDX tokens and extend their financial runway beyond 18 months.
Future financial planning and reporting
The dYdX Foundation is keen on maintaining transparency and accountability. The Foundation plans to provide regular financial updates to its stakeholders in lieu of annual budget votes.
This includes issuing an annual report and a semi-annual report detailing the utilization of the funds. Their next budget request is anticipated to come into consideration when they approach the 18-month runway mark, likely in mid to late 2026 based on current projections.
