January '23

Highlights

• Six grants approved with $116,800 in funding.
• dYdX Merch launch, trading fees research published, and Layer3 quest.
• Looking ahead to v4 with MEV research.
• Applications are up!

Funding Rounds

In January, the DGP issued six grants for a total of $116,800 in funding. We have now approved a total of 94 grants with over $2.9M in funding throughout the grants program.

January saw an uptick in activity across both grants approved and applications received. We’re excited to see continued interest in contributing to dYdX, especially as we start to approach the launch of testnet.

In light of this upcoming launch, the team has started exploring opportunities to onboard talented Cosmos-native teams to help the protocol address open questions and challenges with dYdX v4. That’s what we’ve done with onboarding Skip Protocol and Chorus One to work on Maximal Extractable Value (“MEV”). MEV is the extraction of value from users by reordering and manipulating transactions, a challenge that could significantly impact user trading experiences in v4. We’re thrilled to have these two teams join the community and provide their expertise in this complex area.

Funded Grants

January was an exciting month for community initiatives with the official launch of our dYdX Merchandise program and tons of progress on our dYdX Academy page, which is set to launch in February. As a reminder, these grants are empowering community members to work together on projects that promote dYdX in new ways. Below we highlight these and other grants making great progress:

Completed Grants

dYdX Merchandise Campaign

The dYdX Merch campaign launched with lots of excitement, having received 800 email subscriptions in the pre-release campaign. On the first week of launch, 34 orders were placed with 65 items sold. Unfortunately, an issue with the Coinbase Commerce plugin prevented crypto payments from being supported. That issue has since been resolved with the DePay plugin. Overall, the campaign launch was relatively successful but we’re seeing a bigger use-case for internal merch distributions as a reward and distribution tool. Organic sales are likely to stagnate, and will most likely play a small role in the future of this program. Instead, we’re focused on making this a productive tool to promote dYdX with merch deliveries to events, competitions, and contributors.

Trading Fee Optimization Research

0xCLR and 0xCChan published their research report on optimizing the exchange fees used on dYdX. The paper uses historical data and peer analysis to make thoughtful recommendations for changes to dYdX trading fees. The forum post received lots of great feedback and comments from community members.

Layer3 Quest #2

Layer3 launched the second and last dYdX Quest, an initiative funded to promote dYdX and onboard new users. The quest asks users to deposit $500 and execute an order on the exchange. This quest received over 100 new depositors and has now a net deposit retention of 60,000 USDC on dYdX, meaning that quest users have remained on the exchange as a result of their participation.

Ongoing Grants

dYdX Academy

Our Academy Page, a project to promote dYdX with educational content, is in its final stages! After six months of hard work, the members of our Academy project are gearing up for launch in February. The team is hard at work on final touches and launch-day initiatives to maximize the impact of this effort.

Community Reputation Dashboard

The Karma team is finalizing the community dashboard, a project that will allow community members to be scored on their participation and engagement in the dYdX community. We are expecting the project to publish the work in February.

Trading Journal Application

The trading journal app, a tool that will allow users to better access their trading data and share their performance publicly, is nearing completion. The team has been shipping faster than expected and is getting ready to release an initial beta version to the community. We’ll be gathering community feedback to iterate and improve the product ahead of final release.

Cosmonaut Hacker House Sponsorship - ARCHIVED

Unfortunately, the Cosmos related hacker house planned for this year has been canceled. As a result, the grant has been archived. No funds were delivered to the grantee, so this does not result in any cost to the grants program.

Applications Data

Applications increased from the previous month, with 37 received in January. We’re happy to see contributors kicking off the new year with ideas and excitement to work on dYdX!

Program Updates

AMAs

The team hosted an AMA with grantee and active community members 0xCLR to discuss their research on dYdX risk parameters and optimizing margin factions across markets.

DYDX Sale

Last month, we sold 125,000 DYDX for 379,750 USDC (at an average price of $3.04). This USDC covers costs associated with operating the DGP. It also allows the DGP to fund U.S. based grantees who are prohibited from receiving DYDX-based grants.

Following this sale, the DGP has sold 49% of the DYDX it received (as a reminder, the DGP was granted permission to sell up to 50% of the DYDX it holds).

Expenses

The grants program paid out the following expenses in January: