dYdX, a decentralized trading platform (DEX) and DeFi project on Ethereum (ETH), has the so-called lock up period of 156 million tokens has been extended by 10 months. Originally, the roughly $300 million worth of tokens were supposed to be released in February of this year. Now that lock-up period has been extended until at least December 2023.
📢Token Unlock Update📢
dYdX Trading Inc., dYdX Foundation and certain parties to the Warrants to Purchase Tokens signed an amendment to, among other things, postpone the initial release date applicable to investor $DYDX tokens to Dec 1, 2023
Blog: https://t.co/froqUPL3ay
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— dYdX Foundation 🦔 (@dydxfoundation) January 25, 2023
dYdX price skyrockets
In response to the news, the project’s share price has skyrocketed by nearly 50%. Why the company makes this choice is not entirely known, but it probably has to do with the market. The start of 2023 has been a good time for crypto so far and the release of $300 million in tokens could throw a spanner in the works for dYdX.
To take full advantage of the current uptick in the market, it seems like a solid decision to hold onto the tokens a bit longer and not release until December 1, 2023. Some investors will not be very happy about it, but on the other hand, the price of the token has exploded.
It is a story with positive and negative sides and ultimately this is also one of the risks associated with investing in such projects. At the time of writing, about 15 percent of dYdX’s supply is in circulation. On December 1, another 30 percent of the supply will be released.
Swiss non-profit
The party behind the decision is the Swiss dYdX foundation, whose main goal is to grow the ecosystem around the decentralized exchange. The protocol itself is entirely within the control of the token holders, who are allowed to make decisions regarding the decentralized trading platform with a special governance token.
The price of dYdX was on Wednesday at $ 1.54 and shot to $ 2.00 within half a day. At the time of writing, the token is already at $2.30 and it looks like the foundation’s decision is paying off. dYdX is even 100% positive this year. With a current market cap of $338 million, the project is ranked 103rd in terms of largest cryptocurrency.