Will dYdX Launch a Token?

The margin trading platform dYdX is the biggest defi dapp to not participate in the yield farming trend.

They handle significant volumes, $2.5 billion over 2020, and have processed $17.4 billion worth of loans.

Speculation is ripe therefore they may do a Uniswap style airdrop, but today they announced instead a second round of selling shares to Venture Capitalists (VCs).

“dYdX has raised a $10M Series B round led by Three Arrows Capital and DeFiance Capital,” they said. “We welcome new investors: Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group, and RockTree Capital.”

This follows a previous $10 million round in 2018 led by Chris Dixon at a16z and Olaf Carlson-Wee at Polychain Capital.

Interestingly they say they will use this latest $10 million to “decentralize more parts of our stack and hand over more control to our users.”

What that means in concrete terms is anyone’s guess, with Antonio Juliano, the founder of dYdX, not quite responding to enquires on whether they plan to launch a token.

Some would say they have little choice as plenty may well feel dYdX is selling the equivalent of 1 cent bitcoins (their shares) only to already rich VCs.

That’s what Uniswap did and kept doing, holding out against tokenization while they kept giving more and more ownership of the dapp to monopoly driven billionaires and on the cheap.

That’s until some Nakamoto just copy-forked Uniswap and gave the ownership of SushiSwap for free to its users and migrating liquidity providers.

Uniswap was then forced to launch a token of its own, airdropping for free to its users what ownership had not already been given to VCs.

The public so got ahead of VCs in a way because they got it for free, but VCs probably didn’t pay more than pennies to the token anyway and they were able to get a lot of it.

It was a win win move however that made it Uniswap and SushiSwap, rather than corporate Uni and free sushi. So indicating an ongoin battle between new business models and the old controlled billionaires-first.

As there is probably tons of profits to be made from a sushi style dYdX, you’d think a token is inevitable.

Juliano understandably might be worried about the billionaire’s sherif, capo SEC, but some Nakamoto somewhere in the world wouldn’t necessarily have such worry because 12 years on, Nakamoto is still unknown.

The best twist: such Nakamoto could well be Juliano himself, although he does come across as trembling a bit too much from SEC so it appears unlikely.

So it may need to be a proper Nakamoto, although perhaps with these VCs pulling the strings because public ownership of decentralized infrastructure is a far nicer story.

dYdX afterall inadvertently invented flashloans. It’s a great dapp, great team, and the coders deserve much respect, but precisely because of that, it would be a failure of sort if this space allowed it to be caged under corporate walls.