dYdX's governance has approved a pilot program to compensate liquidated traders with up to $1 million in DYDX tokens, beginning December 1, 2025.
The initiative highlights decentralized governance in DeFi, aiming to enhance dYdX's liquidity and risk management after October's significant network outage.
Pilot Compensation Program Details
The dYdX governance recently approved a significant compensation plan to support traders affected by liquidation. This pilot program allocates $1 million in DYDX tokens to aid those impacted during a one-month period in December 2025.
The initiative involves dYdX community governance, with participation from numerous validators. This underscores the platform's commitment to decentralized decision-making as reflected in the approval process by 112 accounts and 32 validators.
Objectives and Impact
This program's primary target is traders on the dYdX decentralized exchange, focusing on perpetual contracts. The allocation intends to boost market activity and confidence among users affected by previous network issues and liquidations.
An earlier proposal set the fund at $462,000, but the increased allocation of $1 million reflects a broader support scope aimed at encouraging liquidity and risk management on dYdX, notably after the October 2025 outage.
This initiative sets an example among decentralized exchanges, as such structured liquidation rebate plans are rare. By maintaining this support, dYdX is strengthening efforts to retain traders in volatile markets, potentially influencing future industry protocols.
The pilot could lead to new financial, technological developments, enhancing DeFi resilience. The use of DYDX governance tokens in this plan reinforces community decision-making, potentially shaping future governance initiatives within the DeFi landscape.