OTC Trade - 04/29/22
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OTC Trade - 04/29/22

A quick update from the dYdX Grants team.

dYdX Grants completed an over-the-counter trade converting 235,000 DYDX to 947,898 USDC. As previously disclosed, dYdX Grants cannot pay US-based grantees in DYDX; the partial conversion to USDC gets us around that. Below, we share some details around the executed trade:

Order Type: Time Weighted Average Price (”TWAP”)

Order Period: 04/29/2022 04:25 PM ET - 04/30/2022 04:25 PM ET (24 hours)

Volume: 235,000 DYDX

Price: $4.03361

Proceeds: 947,898.34 USDC

The team used a TWAP strategy for the following reasons:

  1. Given the lower volume traded of DYDX on centralized exchanges, the bid on roughly ~$1,000,000 of DYDX traded immediately was very wide from the spot price. The grants team will always search for best-execution when selling DYDX.
  2. To minimize market impact, the team will almost always favor longer executions (such as TWAPs) that break down the selling across a long timeframe and multiple venues. This strategy reduces impact on the price by catching natural trading flow instead of imposing our order on the books. By selling $1,000,000 of DYDX across 24h, the order summed to less than 1% of the average 24h DYDX volume traded on exchanges.

The USDC will be paid out in the coming days to all our U.S. based grantees due for payment. As we continue to issue grants to U.S.-based teams, the team will continue to execute OTC trades to buy USDC for payment obligations.

Publicly disclosing orders to sell an illiquid token pre-trade can be exploited by market participants, and would result in unfavorable outcomes for the community. As such, we will always opt for post-execution disclosure to prevent any front-running of the orders.

We are excited to move forward with payments!