Decentralized Exchange dYdX Proposes $20M Incentive Program for v4 Launch

blockchain.news:

dYdX is moving forward with a proposal for a $20M Launch Incentives Program by  Chaos Labs  to facilitate a smooth migration to its version 4 (v4) platform. The fund, sourced from the dYdX Chain Community Treasury upon its deployment on the mainnet, is earmarked for a six-month duration to motivate the seamless transfer of users and trading volumes to the dYdX Chain. This proposition aims to gather community endorsement and is subject to a governance proposal on the dYdX Chain.

The dYdX Grants team hired Chaos Labs as a service provider for a number of tasks, such as creating portals for market maker risk, LP reward reporting and analysis, and new asset listing. In order to provide permissionless market listings on dYdX v4, they also participated in research with an emphasis on risk reduction, improving user experience, and liquidity provisioning incentivization.

The primary challenge as dYdX nears the v4 launch is migrating and expanding its existing user base. The necessity to secure liquidity and incentivize user migration to the new dYdX Chain is considered pivotal for the success of dYdX v4. Historical data underscores the effectiveness of Liquidity Mining or token reward programs in boosting protocol growth and trading volumes across the DeFi space. The Launch Incentives Program aims to replicate this success by encouraging a swift transition to v4.

The program is structured in two main phases, pre-launch and post-launch, detailed as follows:

Pre-Launch

Trading Reward Genesis Research: A preliminary phase focused on crafting reward distribution methodologies to promote desired user behaviors within the dYdX Chain ecosystem, including deposits, trading, staking, and governance participation.

v4 Analytics and