How to Claim DYDX Token Airdrop?

Dydx exchange is a decentralized trading platform on Ethereum. Spot, Margin, and Perpetual markets are available on Dydx exchange.

Both Spot and Margin trading is on the Layer 1 protocol of Ethereum. On Layer 1 of Dydx, you would pay gas fees for every time you execute a trade. The fees for a single spot trade would be about $100 and it depends on the gas fee which is very high these days. And to open an Isolated Long Margin position, the fee was around $200.

Dydx exchange has a Layer 2 protocol on which Perpetual Futures are available. Layer 2 would cost you just the deposit fees and one-time fees to enable trading. Layer 2 protocol is powered by Starkware and there would be no gas fees when you execute a trade. You would pay only the platform fees which are 0.05% for Makers and 0.1% for Takers which is on par or less than the Centralised Exchanges.

Dydx exchange has raised $65M in a series C round led by Paradigm and backed by global investors. Dydx has recently announced its governance token, DYDX. They have also announced rewards for those who have used their protocol before a certain date. We will discuss more about that.

What is DYDX token?

DYDX is a governance token that allows the users to make decisions for the enhancement of the protocol. DYDX tokens are also rewarded for providing liquidity on the protocol and for staking USDC on the platform.

The total supply of DYDX tokens will be 1,000,000,000, which will be released over a period of 5 years. DYDX token will be launched on September 8, 2021, and about 8.11% of the total supply will be in circulation. You can check more about tokenomics here. 

Out of the initial circulation supply, 75,000,000 DYDX tokens will be distributed to the past users of the protocol.

DYDX Airdrop Eligibility and Requirements

Dydx foundation has announced Retroactive Mining Rewards for those the past users. Here are the requirements and how to check whether you are eligible for it or not.

Users who have traded on Dydx protocols, whether it be Perpetuals, Margin, Spot on Layer 1 or Layer 2, or deposited or borrowed funds into the Dydx pools before July 26, 2021, are eligible to receive DYDX tokens.

Not all users get the same amount of tokens. The number of tokens allocated to you may differ based on your trade volume on the protocol before the given date. Here is a snapshot of tokens/users for different categories.

How to Check if you are Eligible for the DYDX Airdrop?

• Go to the Dydx Retroactive rewards dashboard here. 
• Connect the Metamask wallet. Do not check the boxes and click on 'Recover Stark Key' and Sign on Metamask. If you get something like 'Generate Stark Key', it means that you haven't used the platform before and it is unlikely that you would receive the airdrop
• Then click on 'Recover API Key' and Sign again on Metamask. Now your Metamask is connected to the Dydx exchange.
• Now a retroactive rewards data screen is shown to you. It shows the amount of DYDX tokens you have been allocated. It is as shown in the snapshot below

How to Claim your DYDX tokens?

Congratulations, if you have got some tokens allocated. Let's see how you can claim them.

In order to unlock your tokens, you have to trade on the Dydx Layer 2 platform. You have to meet the Target Volume given in the Retroactive Rewards data in order to fully unlock your tokens.

In order to do that, you need to have some USDC in your Ethereum wallet.

We have to deposit some USDC into the Dydx platform. Click on 'Deposit' and you would get a prompt saying 'Enable USDC'. Click on it and it would cost you some gas fee. It had cost me around $5 of gas fee.

Now that we have enabled USDC, we can deposit USDC. Click and deposit, select the amount of USDC you want to deposit and confirm the deposit. This step also costs you some gas fee. It had cost me around $25 worth of gas. I know it's painful, let's get it done.

We are ready to trade now. If you have traded perpetual, margin, or futures before, it would be easy for you. I will make it simple for you if you haven't done a trade before. To complete a trade, you have to Open or Close a position.

Now go to the 'Trade' tab and select the market you want to trade. There are lots of options, like BTC, ETH, SOL, DOGE, DOT, MATIC, etc. Select any one of the markets and let's open a position.

Dydx Layer 2 offers you leverage up to 25x. Let's initiate a limit order. I have selected the Ethereum market. Let's go LONG. Select the 'Buy' option, amount of ETH, and Limit price. I have deposited $95 and placing an order with a 5x leverage. The amount of ETH is 0.149($472). So for 1% upward movement in the price of ETH, I would be in 5% profit.

ETH has moved a little and I closed my position for a very small profit. As trading happens on Layer 2, you don't have to pay any gas fees while trading. There would be only a platform fee of 0.1% of the trade. 

Now let's go back to the Rewards tab. If you can see above, I have achieved my target trade volume and the tokens are unlocked and ready to be claimed. The tokens are available to be claimed and withdrawn on September 8, 2021. You will also be able to claim your trading fees worth of DYDX tokens. Here is a dashboard with a claim button and claim option which will be activated on September 8. 

Coming to how much the token would be worth, it is quite early to predict the price of the token. Dydx exchange is a solid platform with great fundamentals, like being one of the decentralized perpetual markets. So if we compare with the market cap of some decentralized protocols like Uniswap($15B) and 1inch($587M). With the initial circulation supply of 81 M tokens, a market cap of half a million dollars would get the token price to $6.1, and the airdrop would be worth a minimum of $1900.

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