dYdX price has made a strong recovery recently.
There will be a token unlock on February 3.
The unlock will open up over 150 million tokens.
dYdX token price has joined other cryptocurrencies in a strong rally recently. It has managed to jump from last year’s low of $0.9922 to a high of $1.722. However, there are concerns that the token could have a major drawdown in the coming weeks as the dYdX token unlock nears.
dYdX token unlock
dYdX is one of the biggest decentralized crypto exchanges (DEX) in the world. It handled tokens worth over $953 million in the past 24 hours, second only to Uniswap, the DEX pioneer. The exchange is known for its advanced trading features that include perpetual futures contract and other derivatives. It is also well-known for its low fees for traders.
Like other DEXes, dYdX has its native token that has two primary roles. First, it allows holders to vote for key issues in the exchange. In this regard, it has a similar role to Uniswap’s UNI token. Second, the token provides holders with trading discounts in its ecosystem. Therefore, the rebound of cryptocurrencies has had a positive impact in its ecosystem as volume rises.&
dYdX, however, has a major negative catalyst in the coming weeks. The dYdX token unlock will take place on& February 3 of this year. This unlock will see 150 million tokens unlocked to the market. As a result, it will increase the circulating supply to over 290 million tokens, which will dilute existing investors.
There are other unlocks that happen continually. For example, daily trading rewards happen every month while 1.1 million liquidity provider tokens open monthly. Liquidity and safety modules happen per month. It is estimated that 5.6 million of dYdX tokens are circulated in the market every month. As shown below, dYdX’s tokenomics has so many moving parts that tend to benefit insiders.
Is dYdX token a buy ahead of unlock
In theory, with so much liquidity coming in the market, one would expect that the dYdX price would continue falling. However, in some instances, this is usually not what happens. For example, in this& article,& I wrote that Axie Infinity’s AXS token surged even as the network unlocked its tokens on Monday.&
Further, at times, fundamentals in cryptocurrencies rarely make sense. This explains why the FTX Token, Voyager Digital Token, and Celsius Network are still trading. The three have a combined market cap of almost $1 billion. In fact, I will not be surprised to see the dYdX token price rising ahead of the token unlock. One reason is that the developers could make a big announcement towards the unlock to tilt the balance.
How to buy dYdX token
Kucoin is a cryptocurrency exchange which offers over 200 cryptocurrencies. Kucoin has a wide range of services, such as; a built-in peer-to-peer exchange, spot and margin trading, bank level security and a wide range of accepted payment methods. Users can benefit from a beginner-friendly interface and relatively low fees.
BKEX is a centralized cryptocurrency exchange located in British Virgin Islands. There are 254 coins and 415 trading pairs on the exchange.
The post dYdX token unlock date: How will it affect the price? appeared first on CoinJournal.
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