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dYdX Community Votes to Stake $61M Worth of DYDX Tokens, Strengthening Security

dYdX Community Votes to Stake $61M Worth of DYDX Tokens, Strengthening Security

dYdX Community Votes to Stake $61M Worth of DYDX Tokens, Strengthening Security

The dYdX community has approved a proposal to stake 20 million DYDX tokens, enhancing security measures and protecting against potential control attacks. The proposal, which passed with an overwhelming 91.7% of votes in favor, allows tokens from the community treasury of the decentralized exchange (DEX), valued at over $61 million at current prices, to be staked using the liquid staking protocol Stride.

Staking involves locking cryptocurrency to support the operations of a blockchain network, such as transaction processing and block validation. Participants, known as “stakers,” stake their tokens in the network and receive rewards in return. By staking its native tokens, dYdX aims to decentralize voting power, preventing malicious entities from gaining control over the network and manipulating its operations.

The dYdX network architecture presents a scenario where an attacker with one-third of the voting power could halt on-chain operations, while possessing two-thirds of the voting power could potentially exploit user deposits and community assets within the dYdX Chain. To counter these risks, a malicious actor would need to contribute at least $912 million in staked DYDX tokens, given the current voting power of $456 million. However, with only 11.5% of the total DYDX supply currently staked, this barrier is not insurmountable.

Staking rewards on dYdX are denominated in the stablecoin USD Coin (USDC) and are generated from the fees paid by users for trading on the protocol. Stride’s mechanism allows DYDX stakes to grow automatically over time as rewards are compounded. The dYdX community has agreed to pay a 7.5% fee on the staked position for the staking service.



This article was originally published by a finance.yahoo.com . Read the Original article here. .

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