On October 26, the dYdX Foundation officially pivoted from running an Ethereum layer-2 blockchain to supporting the layer-1 dYdX Chain (DYDX). This move can create more demand for its native token DYDX, which validators are staking to secure the network, and users are spending for the gas fees.
In an announcement sent to Finbold on October 27, the dYdX Foundation highlighted the confirmation of the first block (‘Genesis’) by the dYdX Chain mainnet validators. While stating that its protocol is an open-source software run by a permissionless network.
“The dYdX Chain software is solely open-source software to be used or implemented by any party in accordance with the applicable license. At no time should the dYdX Chain software be deemed to be a product or service provided or made available in any way by the dYdX Foundation. Interactions with the dYdX Chain software are permissionless and disintermediated, subject to the terms of the applicable licenses and code.”— The dYdX Foundation
Interestingly, the old ERC-20 governance token that used the ticker DYDX will now be called ethDYDX. This token can be bridged to the dYdX Chain — in a one-way bridge — to mint the Wrapped ethDYDX (wethDYDX). The wrapped governance token will have the same utility as the former DYDX for the remaining Ethereum layer-2 activities.
On the other hand, the new DYDX, native for the dYdX Chain, will have three core utilities:
- Assisting with governance on the dYdX Chain;
- Staking by validators to secure the network;
- Paying for transaction gas fees for “DYDX-denominated transactions”.
Besides the “DYDX-denominated transactions”, this layer-1 blockchain will also support “USDC-denominated transactions”. The latter will use the stablecoin Circle USD (USDC) for the gas fees.
DYDX price analysis
Meanwhile, DYDX is trading at $2.40, with 5.41% gains in the last 24 hours, by press time. Following the dYdX mainnet going live, the token traded as high as $2.51 on the day and as low as $2.28.
Notably, the increased utility of this digital asset on the dYdX Chain can bring a renewed demand for DYDX. Its circulating supply is currently set at 1 billion units. However, this amount could change in the future, subject to governance decisions, as stated in the dYdX Foundation blog.
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