The dYdX Chain is a proof-of-stake blockchain network built using the Cosmos SDK and leveraging CometBFT for consensus. The DYDX token is the L1 protocol token for the dYdX Chain, as agreed by the dYdX community through dYdX governance (Snapshot vote and an on-chain vote)

Holders of the DYDX token can use their tokens to run a Validator or stake their tokens to a Validator in order to participate in securing and governing the dYdX Chain network.

## Migration to the dYdX Chain
The wethDYDX Smart Contract enables the migration of ethDYDX from Ethereum to the dYdX Chain.

When interacted with, the wethDYDX Smart Contract would carry out the following functions in a fully permissionless and automated manner:
Receive and permanently lock the ethDYDX tokens sent by the user to the wethDYDX Smart Contract;
Send a wrapped version of the Ethereum-based DYDX token (“wethDYDX”) to the user on a 1-1 proportional basis on Ethereum; and
dYdX Chain Validators can also read and ingest the information in the wethDYDX Smart Contract such that corresponding DYDX can be distributed to users by Validators on the dYdX Chain once there is confirmation that Step 1 above is complete and the ethDYDX is permanently locked in the wethDYDX Smart Contract.

More information about the migration of ethDYDX from Ethereum to dYdX Chain is available here.

## dYdX Chain (DYDX) Tokenomics
Learn more about DYDX tokenomics, and view project details below and read through this Token Mechanics blog.

## What is the Allocation for DYDX?
DYDX is distributed to users by validators on the dYdX Chain on a 1-1 proportional basis based on the amount of Ethereum-based DYDX (ethDYDX) that each user sends to the wethDYDX Smart Contract.

The allocation of DYDX is based on the allocation of ethDYDX. The allocation of ethDYDX changed since its launch on August 3, 2021 due to several governance proposals. The updated allocation of ethDYDX:

* 27.7% is allocated to Investors
* 15.3% is allocated to Employees and Consultants of dYdX Trading or Foundation
* 7.0% is allocated to Future Employees & Consultants of dYdX
* 14.5% is allocated to User Trading Rewards
* 5.0% is allocated to Retroactive Rewards
* 3.3% is allocated to Liquidity Provider Rewards
* 26.1% is allocated to Community Treasury
* 0.6% is allocated to Liquidity Staking Pool
* 0.5% is allocated to Safety Staking Pool

Source: dYdX Documentation