dYdX Foundation Puts Forward Fundraising Proposal, Seeks $30M

The dYdX Foundation, the foundation that supports decentralized exchange dYdX, has requested $30 million in funding from the project’s governing decentralized autonomous organization. 

The dYdX foundation provides legal, R&D, marketing, and technical support to the decentralized crypto trading platform. 

dYdX Foundation Requests Funding 

According to the dYdX foundation, the requested $30 million will be spent over the next three years. The dYdX foundation assists the project in several areas, such as legal, technical support, marketing, and R&D. The dYdX trading project includes a perpetual futures contract exchange and a specialty blockchain in the Cosmos and Ethereum ecosystems. According to the foundation, it aims to help dYdX grow into the “exchange layer of the internet.” 

“The dYdX Foundation can help support and accelerate the growth of a robust dYdX ecosystem. The Foundation’s vision is that the dYdX Chain will become the underlying infrastructure of the largest DeFi protocol in the world, where any asset with a price feed can be traded. Thus, the dYdX Chain shall become the exchange layer of the Internet, governed entirely by code and controlled by its stakeholders.”

The $30 million would consist of 10.5 million DYDX tokens, expanding the Foundation’s operational runway beyond 18 months. 

No Small Request 

The budget request by the foundation is no small one. If granted by the dYdX token holders, the foundation would receive 4% of the DAO’s current treasury. Since it will be spent over the next three years, it would exempt the dYdX foundation from submitting annual budgets for review and approval, a common practice for other DAOs and their foundations. The request has already garnered considerable approval from dYdX stakeholders after the Foundation first shared it on Friday. 

The request will now go to a vote, which will run until the 2nd of February. Half of the requested budget would cover payroll, with 18% allocated to marketing and growth. 14% will go to various legal disbursements and 5.5% to contractors, among other items. 

Reducing Risk

The Foundation also outlined its commitment to responsibly managing money through capital preservation strategies that will help it reduce risk. It has already diversified away from USDC, instead leaning into treasury bonds after last March’s banking crisis and the subsequent stablecoin de-pegging. While this was a move away from crypto, it reduced risks significantly while tripling yields. 

“Treasury management and asset protection have always been at the center of our Finance team’s attention. Our investment policy is designed first to ensure capital preservation, followed by maintaining liquidity and, lastly, generating additional yield. In 2023, we implemented several new approaches and policies. Notably, our $6M investment bond ladder strategy deployed in US Treasuries reduced our USDC exposure by >90%, 3x’d our previous APY, and significantly reduced counterparty risk.”

The Foundation also added that it would diversify some of the funds into fiat and stablecoins and invest in expanding its staking operations. Currently, the dYdX Foundation earns yield on around 2.5 million DYDX tokens. If this request is approved, the next budget request will likely come in mid-2026, towards the end of the 18-month runway. The Foundation also stated that it would issue an annual and semi-annual report detailing how the funds were utilized. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.