Introduction

    • In this Analysis, You will read about the DYDX token. DYDX holders are bracing for a massive event next month ( Middle of February), as 105% of the circulating supply will be distributed to investors and team members.
    • We want to know if holders have begun preparing for this massive unlock or not. If so, what actions are they taking to prepare? How do you expect the market to react in the weeks leading up to and following the unlock?

    Analyzed by Hess - Reading Time Almost 10 Min.

    What is DYDX token?

    • DYDX (dYdX) is the governance token for the layer 2 protocol of the eponymous non-custodial decentralized cryptocurrency exchange. It serves to facilitate the operation of layer 2 and allows traders, liquidity providers and partners to contribute to the definition of the protocol's future as a community.

    • Token holders are granted the right to propose changes on the dYdX’s layer 2, and are presented with an opportunity to profit through token staking and trading fee discounts.

      Built on Starkwire’s StarkEx scalability engine, layer 2 is used for trading of cross-margined perpetuals on the platform. The scaling solution allows dYdX to increase transaction speed, eliminate gas costs, reduce trading fees and lower​​ minimum trade sizes on the protocol.

    Source:

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    DYDX Price Vs. Popular tokens

    Before Holder’s activities, Let’s see how DYDX Price performed in the last three months compared to ETH, BTC, Matic, and BNB. Four popular tokens in the market.

    • ETH Vs. DYDX: As you may know, At the beginning of January 2023, All token prices started to increase. But Before January, During November, DYDX pumped from 1.5$ to 2.4$. Right After ETH pump. When DYDX started to increase, ETH price Decreased. Around DYDX, Both tokens’ movements were similar. After January, The growth of ETH was better than DYDX.
    • BTC Vs. DYDX: Like the ETH price, When the BTC price decreased in November, the DYDX price increased to 2.4$. After a short time, DYDX decreased, and around January, DYDX price movement was like BTC. Until January 12, Both tokens moved in the same path, but After January 12, BTC growth was much higher than DYDX.
    • MATIC Vs. DYDX: Matic movement was similar to DYDX. Their Growth and movement were similar. The only difference was after January 12, When the Matic price increased more than the DYDX token.
    • BNB Vs. DYDX: Like Matic, the BNB price was similar to Matic. DYDX moved like a Matic token over the last 3 months. The market cap of Matic and BNB is about 50x higher than DYDX right now.
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    Holders Breakdown

    • Overall, DYDX has 419 whales. Who is Whale? Every holder who holds more than 100K DYDX, which is worth more than 200K US dollars, is a Whale. So, Every 419 wallets hold more than 100K DYDX.
    • The large group of holders holds 100-1000 DYDX in their wallets. This group of holders is 41.6% of total users. The second large group of holders holds 10-100 DYDX in their wallets. This group of users is 25.5% of total holders.
    • The lowest group of users have more than 100K in their wallets. Only 55 unique wallets hold more than 100K DYDX. This group of users is 0.2% of total holders.
    • Why are DYDX holders important? In my opinion, The DYDX unlock program is not important for users that hold below 100 DYDX. As you have seen, There are too many holders with more than 100 DYDX in their wallets.
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    DYDX Swaps

    We don’t have access to CEXs activities, and we don’t know what DYDX holders did with their tokens But, Based on on-chain data, We can track the Swap activities of DYDX holders.

    • Overall, Since August 2022, 9.2K Unique swappers swapped their DYDX, and 7.9K unique swappers bought DYDX.
    • In the below chart, What is important is swap activities during January 2023. I put dates before January 2023 in the below chart to see how swap activities have changed recently.
    • Before January 2023, The total daily number of unique swappers was below 100, but after January 2023 increased day by day and reached above 100. More users sold their DYDX compared to users who bought DYDX. Sellers were About 2x higher than Buyers.
    • Based on Swap transactions, The total number of transactions from and to DYDX was similar. Like the Number of swappers, The total daily number of swaps increased after January 2023. Again, Like Swappers, DYDX had more sellers compared to buyers.
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    DYDX Transfers

    There is proof in cryptocurrency that a large token amount is transferred to CEXs. It means they want to sell all of the tokens. As I mentioned, We don’t have CEXs activities, but we can track how users transferred their assets to CEXs from a chain. In this section, I want to track all DYDX activities from and to CEXs.

    • Based on Users, it is true that the total number of users increased when DYDX unlock news spread, but I can not see any unusual activities after January 2023. However, I should mention that the total number of users who transferred their DYDX from Ethereum to CEXs was higher than CEXs to CEXs. Also, The number of users increased from 200 to 500.
    • Based on transactions, The share of transfers shows that when DYDX news spread, the share from Ethereum to CEXs increased slightly but quickly returned to normal. I can say 50% of users transferred to CEXs, and 50% of users transferred to the Ethereum chain.
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    Stake Vs. Unstake

    Staking tokens is interesting, but it could be dangerous. On DYDX, the danger is not the point. Because users can unstake their stakes immediately. In order to find any unusual activities, I tracked DYDX stake and Unstake over time.

    • Based on Transactions, There weren’t any unusual activities. Because the total number of stakes and unstake didn’t change. But based on the total volume, I can see a usual event. On December 20, Users unstaked nearly 15M DYDX from the DYDX platform. It is not usual because the average daily unstake amount is around 100K. So, We can say these users unstaked their stake to swap or maybe sell in CEXs.
    • Overall, The total unstake amount was 50M DYDX, and the stake amount was 20M.
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    Conclusion

    • The short answer to this analysis's main question is that DYDX will not be impacted by the next unlock events. Why? Because the current market cap is not too high, and if It becomes 2x higher than the current amount, it is still in a good position. But for a short time definitely will impact in price. Some unusual activities like 5M DYDX movement from top holders or increasing the swap and transfer volume. But On the other hand, some users acted opposite these users. My Conclusion is maybe the price impact is 10%, but DYDX indeed has plans to lower the impact of Sell pressure. Because these tokens will distribute among their investors and team. They won’t sell all tokens immediately.
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    What is DYDX Platform?

    • dYdX is a leading decentralized exchange that currently supports perpetual trading. dYdX runs on smart contracts on the Ethereum blockchain, and allows users to trade with no intermediaries.

    • dYdX Features

      Perpetuals on Layer 2 - ____

      • Perpetuals trading with up to 20x leverage
      • Pairs offered: BTC-USD, ETH-USD, LINK-USD, and more


      Source:

    Method

    • I divided my findings into multip categories to understand better. The DYDX contract address is: 0x92d6c1e31e14520e676a687f0a93788b716beff5

    • I used the Messari.io website to extract primary data about the DYDX token. I Hardcoded it to show in a single chart.

    • After basic information about the DYDX token, I compared the DYDX price with other popular tokens in the market. To examine the average price of DYDX, I used ethereum.core.fact_hourly_token_prices table and filtered DYDX as a symbol.

    • From ethereum.core.fact_token_balances table, I examined DYDX holders and whales. Also, By joining my findings with the Delta balance table, I examined movement from top holders.

    • Based on Chain data, I tracked swap activities from and to the DYDX token. To find this data, I used a swap table on Ethereum.

    • Another available on-chain data is transfer activities. I used the Transfer table and looked for unusual activities of DYDX transfers. Also, I joined to_address with the DIM label to find which CEX was popular among DYDX holders.

    • DYDX users can stake their tokens on the DYDX platform. All stake and Unstake interacted with the 0x65f7ba4ec257af7c55fd5854e5f6356bbd0fb8ec contract address. So, I used that address to extract the DYDX stake and unstake.

    Full Analysis

    DYDX Overview

    Let’s understand the DYDX token better and know what DYDX holders expect to happen within the next month.

    • 76.7% of total DYDX, which is 760M DYDX, is still locked, and only 23.3% of total DYDX is distributed into the market. In February, DYDX will unlock about 150M DYDX tokens which are 15% of the total DYDX and, based on the current price of DYDX, is worth 233M US dollars. So, DYDX users expect 150M DYDX to be unlocked next month. It’s a huge number, and they should consider it.

    • The Current Circulating Supply of DYDX is 147M, and next month will be 2x higher than the current Amount. However, the Fully diluted Valuation is 1.9B US dollars. It means, Based on the current price, When all DYDX supply distributes in the market, The DYDX market camp will be 1.9B US dollars. Right now, The DYDX market cap is 279M US dollars.

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    THANK YOU FOR READING!

    ALL CODES AND CONTENTS WERE WRITTEN BY HESS.

    :bird: Twitter: 0xhess

    :t-rex: Discord: hess#0890

    :calendar: Analyze Date: 2023/JAN/25


    Let’s see which user group has changed since January 2022.

    • Those holders that hold 10-100 DYDX had too many ups and downs. They increased during March from 20 to 35%. Recently, The share of this group reached 15-30%. In my opinion, We should take a closer look at January when DYDX news spread quickly.
    • The share of users with 10K-100K DYDX decreased 2-4% in the middle of January compared to before January. Wallets with 100-1000 DYDX increased by about 1%. Other groups of users had similar activities and decreased by 1-2%.
    • The Top wallets hold nearly 200M DYDX in their wallets. This amount of DYDX only holds by three wallets. None of them didn’t anything in the last 90 days.

    • I tracked the top 30 holders of DYDX in the last three months. There were two unusual activities. A wallet transferred its DYDX from one wallet to another wallet. Also, Nearly 5M DYDX transferred out to CEXs. Three wallets increased their amount of DYDX. Other top wallets didn’t do anything and held their DYDX.

    DYDX Unlock Event

    • On Feb 2023 dYdX will unlock a massive amount of dYdX (DYDX-USDtokens for investors and employees, which makes dYdX token a hard pass, a sell, or even maybe a short candidate in our book. The supply will double very soon, on February 2nd. Then by next year it will 5X which will dilute the value of each token even more.
    • The most important part of swap activities is Swap volume in USD. The total daily swap volume increased significantly when DYDX unlock news spread. Unlike transactions and swappers, The total daily swap volume to DYDX was nearly to swap from DYDX. Also, On some days, The swap volume to DYDX was higher than from DYDX.
    • Overall, Users swapped 26.5M US dollars from DYDX and 25.8M US dollars to DYDX. As you can see, Numbers are similar.

    Top tokens and Platforms

    Swap From DYDX: Based on Transactions and volume, WETH was the most popular token that users swapped to DYDX. Nearly 1B US dollars were swapped from WETH or ETH to DYDX in 41K transactions. The three top tokens were stablecoins.

    Swap To DYDX: Like Swaps to DYDX, The top swapped tokens from DYDX were similar. Again, WETH, USDT, USDC are three popular tokens that users swapped from DYDX.

    I examined platforms that users used more to buy and sell their DYDX on the Ethereum chain.

    • Based on Transactions, Uniswap was the top platform that users bought and sold DYDX. If we ignore Mev Bot and Metamask, 1inch and 0x were in the next place based on transactions.
    • Based on Volume, Again, Uniswap was the top platform where users bought and sold their tokens. Like the number of transactions, 1inch and 0x was in the next place.

    What is important here, The volume of DYDX which transferred. Unlike transactions and users, The total transferred volume became 10x higher than normal days. The transferred volume was 1-2M per day but recently increased to 20M US dollars.

    • However, I should mention that the total transferred volume from CEXs to the chain increased too. But Ethereum to CEXs was higher than Ethereum to CEXs.

    Like every event, We can see Binance at the top list. Based on the total number of transactions and volume in USD, The most popular CEX was Binance. Users transferred 440M US dollars from Ethereum to Binance and 445M US dollars from Binance to Ethereum. You can the rest of the CEXs in the below charts.

    IMPORTANT UPDATE:

    • Based on the latest news, DYDX Extends 156 Million Token Lock-up Periods by 10 Months. It means they postponed the February unlock for 10 months.
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