dYdX Foundation Seeks $30M Funding, Commits to Publishing Yearly Expenditure Report
The dYdX Foundation, which supports the decentralized cryptocurrency exchange dYdX, has put forth a funding request of $30 million for the DAO (decentralized autonomous organization) overseeing the project. The allocated funds will be utilized over the course of the next three years. Operating out of Switzerland, the dYdX Foundation provides various services such as legal support, research and development, marketing, and technical assistance to the crypto trading venture. As outlined in its proposal, the Foundation aims to position dYdX as “the exchange layer of the internet.”
The requested budget is substantial and accounts for 4% of the DAO’s existing treasury. If approved by dYdX tokenholders who act as voters within the DAO, it will exempt the Foundation from the obligation to submit annual budgets for review and approval. Such scrutiny is a commonly adopted practice among other DAOs and their corresponding foundations.
The initial announcement of the budget request was met with widespread approval from dYdX stakeholders ranging from validators to delegates. Now, the proposal will undergo a voting process which will take place until February 2.
The payroll constitutes almost half of the requested budget, with 18% allocated for marketing and expansion efforts, 14% for various legal expenses, and 5.5% for contractors among other designated expenses.
The Foundation emphasized its commitment to responsible financial management in a forum post, highlighting strategies focused on capital preservation and risk reduction. In an effort to minimize risk, the Foundation diversified its holdings away from USDC and invested in treasury bonds following the stablecoin de-pegging triggered by the banking crisis in March last year. This move, although stepping away from the crypto market, successfully reduced risk and tripled yields.
The Foundation plans to diversify some of the acquired funds into fiat and stablecoins, while also expanding its staking operation. Currently, the Foundation earns staking yield on 2.5 million dYdX tokens. The funding of $30 million, if approved, will consist of 10.5 million DYDX tokens and extend the operational runway of the Foundation beyond 18 months.
The Foundation expressed its intent to file another budget request “when we approach 18 months of runway,” which is anticipated to occur in mid or late 2026 based on current projections. Instead of annual budget voting, the Foundation aims to issue detailed annual and semi-annual reports outlining the utilization of the funds obtained.