According to CoinDesk, the native token of the newly-released dYdX chain, DYDX, has risen by more than 20% in the past 24 hours. This comes just 16 days before more than $500 million worth of tokens will be unlocked for early investors and core team members. The surge in the DYDX price follows the project's launch of its layer-1 blockchain based on Cosmos, which allows validators to receive a portion of trading revenue as a reward for staking. Over the past 30 days, DYDX has more than doubled in price as speculators anticipated the token's migration from Ethereum to the dYdX chain.
However, a large token unlock in just over two weeks has the potential to dampen spirits. There are currently 179 million DYDX tokens in circulation, and the upcoming unlock will increase that to 395 million, according to token.unlocks. The unlock was initially scheduled for January this year but was postponed until December, a decision that spurred an initial price hike earlier this year. Research from The Tie published earlier this year reveals that large token unlocks often lead to a decline in price as demand for the asset can't keep pace with the increase in supply, known as inflation. To remedy this, DYdX CEO Antonio Juliano has incentivized staking, a method that involves locking tokens on a blockchain to receive rewards. Juliano announced on Tuesday that stakers will receive 'cold hard USDC' for staking and that validators will receive 100% of trading fees. USDC is a dollar-pegged stablecoin.
