Bittime - dYdX, a decentralized crypto exchange (DEX), took a significant step to increase its security by staking 20 million DYDX tokens, worth over $61 million, using the liquid staking protocol Stride.
This step was taken amidst a surge in trading activity on the platform.
Community Agrees Unanimously
The dYdX community unanimously approved the proposal on April 6, with an astonishing 91.7% of votes in favor.
This green light allows DEXs to use tokens from their community treasuries for staking purposes.
Responding to Network Growth
According to dYdX, the decision to stake was driven by the platform's rapid growth.
They noted a stagnation of DYDX tokens staked by validators and a significant increase in exchange deposits, with more than $100 million in USDC deposited in just the last week.
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Staking for Better Security
Staking is the process by which users lock up their crypto to support the operation of a blockchain network.
In return for locking up their tokens, stakers receive rewards, usually in the form of additional tokens.
By staking DYDX native tokens, dYdX aims to protect its network from potential control attacks, such as 51% attacks.
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Deterring Bad Actors
dYdX highlights vulnerabilities in its network architecture. They acknowledged that an attacker with only a third of the voting power could potentially halt on-chain operations.
Additionally, owning two-thirds of the voting power could allow malicious actors to misuse user and community funds within the dYdX Chain.
Staking tokens from community coffers significantly increases the barrier to carrying out such attacks.
As stated by dYdX, “malicious actors would have to deposit at least $912 million in staked DYDX to control the protocol,” making a large-scale attack much less likely.
Rewarding Stakers
Staking rewards on dYdX are distributed in the form of USDC stablecoins and are generated from users' trading fees on the platform.
The Stride mechanism enables automatic growth of DYDX staking over time through a reward compounding process. The dYdX community will pay a 7.5% fee on staking positions to Stride for their services.
dYdX is on the Rise
At the time of writing, dYdX had a total value locked (TVL) of $504.48 million on-chain, according to data from DefiLlama.
Additionally, the network has generated over $48.59 million in fees over the past year, highlighting its position as a major player in the decentralized crypto exchange landscape.
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You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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