Once a leading decentralized derivatives exchange, dYdX is now in an awkward position.
DYDX has fallen from a 2024 high of about $4.52 to around $0.105 today, a drop of nearly 98%.
Its circulating market cap is now only about $90 million, with a fully diluted valuation of around $100 million.
But it hasn’t stopped operating. It still has trading volume and fee revenue, and 75% of its net protocol revenue is used to buy back DYDX.
More notably, in July 2026, the original development team partnered with Robinhood to launch a new decentralized exchange called Arcus.
The old project is still running, while the development team has launched a new product.
The key question here is:
Is DYDX an established exchange token that the market has undervalued, or a project that is losing its competitive edge?
1️⃣ What exactly does dYdX do, and what is its background?
Founded in 2017 by Antonio Juliano, dYdX is a decentralized trading project that originated in the United States.
Put simply, it mainly offers perpetual contract trading for crypto assets such as BTC and ETH.
Users can connect a wallet and trade with leverage on-chain, without handing their assets over to a trading platform for centralized custody as they would with a traditional centralized exchange.
In its early days, dYdX received investment from a number of well-known institutions, including:
a16z, Polychain Capital, Dragonfly, DeFiance, and others.
Later, dYdX gradually developed its own blockchain, dYdX Chain, built using Cosmos technology.
Like Hyperliquid, it aims to improve execution speed and the trading experience with a chain purpose-built for trading.
During the previous DeFi cycle, dYdX was one of the most prominent projects in decentralized derivatives trading.
2️⃣ How much real business does dYdX still have?
Let’s start with the latest data.
According to DeFiLlama, as of late October 2026:
The total value locked in the dYdX V4 protocol is approximately $70 million.
Perpetual contract trading volume over the past 30 days was approximately $1.27 billion.
Fee revenue over the past 30 days was approximately $250,000.
Open interest was approximately $50 million.
Open interest refers to contract positions that traders have not yet closed. It is also an important measure of activity in a trading market.
These figures show that dYdX still has real trading demand.
But its business is significantly smaller than it was in the past.
The foundation’s 2025 annual report stated that cumulative trading volume across all historical versions of dYdX was approximately $1.55 trillion.
Today, however, trading volume over the past 30 days is only in the low billions of dollars.
It is worth noting that historical cumulative trading volume and current monthly trading volume cover different periods, so you cannot directly calculate a percentage decline between them.
However, recent data over consecutive periods shows that the business has indeed contracted significantly.
3️⃣ How much has dYdX’s fee revenue declined?
According to DeFiLlama’s historical data:
October 2025: approximately $1.74 million.
December 2025: approximately $428,000.
March 2026: approximately $327,000.
June 2026: approximately $103,000.
September 2026: approximately $267,000.
As you can see, revenue recovered somewhat in the second half of 2026 from its June low, but it remains significantly below 2025 levels.
Comparing October 2025 with September 2026, monthly revenue fell by approximately 85%.
This reflects the pressure on the platform’s competitiveness.
For an exchange, revenue mainly comes from trading fees.
When trading volume declines, revenue is usually affected as well.
So, to judge whether DYDX is worth investing in, you can’t just look at how far its token price has fallen. You also need to see whether traders and revenue can start growing again.
4️⃣ Is it true that 75% of revenue is used to buy back DYDX?
This mechanism does exist, and it has been approved through community governance and put into effect.
Under the current revenue allocation mechanism, net protocol revenue is divided into four main parts:
75% is used to buy back DYDX on the market.
15% is allocated to DYDX stakers.
5% is used for the MegaVault liquidity mechanism.
5% is used for DAO operations and other expenses.
Two distinctions are important here.
First, it is 75% of net protocol revenue—not 75% of total trading volume, nor 75% of total trading fees before related costs are deducted.
Second, a buyback is not the same as a burn.
DYDX acquired through buybacks is primarily used for staking to enhance network security, and is managed by the community treasury.
So you can’t simply assume that every buyback permanently reduces the total token supply.
However, buybacks can convert part of the protocol’s revenue into market demand for DYDX.
This gives the token an additional value-capture mechanism compared with tokens that only have a governance function and no revenue-sharing mechanism.
5️⃣ How much DYDX has actually been bought back, and how effective has it been?
According to the September report published by the dYdX Treasury SubDAO on October 13:
In September 2026, the buyback program purchased approximately 1.081 million DYDX on the market.
The total transaction value was approximately $128,900.
The average purchase price was approximately $0.1192.
These figures show that the buyback is not just a promise in an announcement; actual buying has taken place.
But another question is also worth considering.
DYDX’s current circulating market capitalization is approximately $90 million.
Even if we simply multiply September’s buyback amount of approximately $128,900 by 12, that would amount to only about $1.55 million over a year.
That is approximately 1.7% of the current circulating market capitalization.
This is only a scenario estimate based on the actual amount executed in one month; it does not mean that this amount will definitely be bought back over the next year.
Moreover, the repurchased tokens are not directly burned.
So the real question is not whether 75% is a high enough share, but how much the protocol can actually earn.
If revenue is too small, even allocating a large share to buybacks may have only a limited effect on the token’s market supply and demand.
Conversely, if trading volume and revenue recover in the future, the scale of buybacks could also increase.
6️⃣ What is DYDX’s supply like? Are there still large unlocks ahead?
According to recent CoinGecko data:
Approximately 846 million tokens are in circulation.
The current total supply is approximately 958 million.
The platform lists a maximum supply of 1 billion.
In other words, approximately 84.6% of the initial 1 billion token supply is currently counted as circulating.
According to the unlock schedule previously disclosed by the dYdX Foundation, the scheduled unlocks of tokens held by early investors and the team were completed in June 2026.
However, the fact that circulating supply is lower than total supply means that some tokens are still not counted as circulating.
In addition, the official token documentation retains a design that allows an annual inflation mechanism to be activated in the future, with an original limit of 2% per year.
According to official disclosures as of April 2026, this mechanism had not been activated. No official information has been found confirming that it had been activated by October.
Therefore, DYDX should not simply be described as a token with a permanently fixed supply that can never be increased.
Overall, the pressure from large early-investor unlocks has eased, but future supply changes and the use of community funds still warrant attention.
7️⃣ What does the original development team’s launch of Arcus mean for DYDX?
This is one of the most notable changes for dYdX in 2026.
In July 2026, dYdX Labs announced a partnership with Robinhood to launch a new decentralized exchange, Arcus, on Robinhood Chain.
Arcus will cover not only cryptocurrency trading but also expand into assets such as tokenized stocks, stock indices, and commodities.
In terms of business direction, Arcus aims to enter the broader on-chain financial trading market.
But it is important to clarify:
Arcus and dYdX Chain are two independent products running on different infrastructure.
The dYdX Foundation has made it clear that the original dYdX Chain will continue to be governed by the community, with its trading, staking, validator, and governance functions remaining operational.
DYDX also remains the governance and staking token for the original chain.
There is currently no official evidence that revenue generated by Arcus will automatically flow into the DYDX buyback mechanism.
This means:
Even if Arcus does well in the future, you can’t assume that DYDX will benefit as a result.
For DYDX holders, what really matters is how many development resources the original chain will receive going forward, and whether its existing trading business can remain competitive.
8️⃣ Has dYdX already started scaling back its business?
The latest governance developments do show that some adjustments are underway.
On September 17, 2026, dYdX governance voted to reduce the cap on active validators from 31 to 21.
Then, on October 23, a proposal was posted on the governance forum to close a number of low-activity markets, involving trading pairs such as APE, BLUR, ENA, and ONDO.
It is important to distinguish between the two:
The reduction in the number of validators has already been implemented.
Closing the relevant markets still requires confirmation through the governance process. A forum proposal should not be described as meaning that all of them have already been delisted.
These changes do not mean that the project is about to shut down.
Removing markets that have long had little trading volume can reduce maintenance costs and improve resource efficiency.
But from another perspective, this also reflects that some markets lack sufficient users and liquidity.
An exchange needs consistently active traders, not simply a larger number of trading pairs.
9️⃣ Can dYdX still compete with Hyperliquid?
The competitive landscape for decentralized perpetual exchanges is now very different from what it was a few years ago.
Platforms such as Hyperliquid, Lighter, and Aster are constantly competing for market share.
Hyperliquid in particular has established a clear advantage in trading depth, user base, and market liquidity.
The exchange industry also has strong network effects.
The more users there are, the better trading liquidity tends to be.
The better the liquidity, the lower the trading slippage tends to be.
A better trading experience, in turn, makes it easier to attract new users.
This allows leading platforms to keep building on their advantage.
dYdX’s brand, operational experience, order-book trading technology, and community are still assets.
But having once been an industry leader does not guarantee that it will become one again.
Especially after the development team launched a separate new product, dYdX needs to prove its competitiveness through actual trading volume and revenue.
🔟 DYDX has a market cap of only $90 million—is this an opportunity or a value trap?
From a valuation perspective, DYDX is certainly worth paying attention to.
A project that has historically generated huge trading volumes, has its own blockchain and actual fee revenue, and uses 75% of net protocol revenue to buy back tokens currently has a market cap of only about $90 million.
Taken on their own, these factors seem to offer some appeal.
But valuation cannot be separated from business trends.
Annualizing the approximately $250,000 in revenue over the most recent 30 days gives roughly $3 million per year.
Against the current circulating market cap of approximately $90 million, that implies a market-cap-to-annualized-protocol-revenue ratio of about 30x.
This is not a price-to-earnings ratio, because protocol revenue is not the same as a company’s net profit, nor does it mean that all revenue directly accrues to ordinary DYDX holders.
If revenue continues to decline, a market cap of just $90 million may not be cheap.
If trading volume recovers in the future and revenue returns to higher levels, the mechanism that allocates 75% of net revenue to buybacks could provide more meaningful support for the token’s value.
Overall, DYDX is not dead. It still has a real business and a clear token value-capture mechanism.
But its biggest current challenges are the sharp contraction in trading volume and revenue, increasingly strong competitors, and the original development team’s expansion into a separate new trading platform.
DYDX is therefore more like an established DeFi project waiting for a business turnaround than a cheap token that is worth buying simply because it has fallen 98%.
The most important things to watch next are whether trading volume can recover sustainably, whether actual monthly buyback amounts can grow, and whether the community can keep the original product competitive.
For projects like this, a low market cap could mean room for a valuation recovery, or it could reflect concerns that the business will continue to shrink.
What ultimately determines DYDX’s long-term value is not how much it was once worth, but how much revenue it can generate in the future and how much real value that revenue can bring to the token.
The above represents only personal views and project research and does not constitute investment advice.
#DYDX #HYPE #GMX