Summary
- We propose a four-week pilot program of a frontend trading competition - dYdX Trading Leagues. The competition will distribute a total of up to $1M in DYDX prizes (up to $250K in DYDX per week) to non-API traders. This Trading League will test whether short-term, performance-based trading competitions can sustainably drive trader engagement, attract new users, and liquidity depth on dYdX.
- We request $1M in DYDX (3,030,303.03 DYDX calculated using a 7-day TWAP at a $0.33 DYDX token price) from the Community Treasury to fund the weekly rewards pool.
- The TWAP and total amount of DYDX requested have been updated as of October 27, 2025.
Abstract
The league will be hosted on the dydx.trade user interface as well as the Trading Arena platform, a purpose-built tool designed to support transparent, verifiable, and customizable trading competitions for the dYdX community.
This pilot program will test the effectiveness of short-term trading leagues as a means to stimulate organic non-API trading activity, incentivize new trader participation, and increase visibility and competitiveness of dYdX Chain markets.
We request $1M in DYDX (3,030,303.03 DYDX calculated using a 7-day TWAP at a $0.33 DYDX token price) from the Community Treasury to fund the weekly rewards pool. The requested DYDX will be sent to an address controlled by the Treasury SubDAO (dydx10azu6arkhqjfzvya6877neq86h2awp79m84w6q) for safekeeping. The Treasury SubDAO will then send the funds for the prize to be distributed to the winners, up to $250K per week.
Motivation & Rationale
Trading leagues have proven to be an effective mechanism for driving engagement and discovering new trading talent. Competitions offer a transparent, performance-based way to attract a valuable user cohort and distribute rewards while simultaneously generating measurable, sustainable activity on the protocol.
Trading Leagues on dYdX v3 were popular among traders and served as a key growth driver. In Q3 and Q4 of 2025, the number of trading competitions on dYdX increased significantly, delivering some promising results.
Across 14 small-scale competitions on dYdX Trading Arena, $100M in trading volume and roughly $60K in fees were generated from participating addresses, with a total prize pool of about $50K. These campaigns have produced valuable insights that have already improved the performance of more recent competitions and are informing the design of the upcoming dYdX Trading Leagues.
It’s also worth noting that BasedApp, a trading competition platform built on Hyperliquid, has demonstrated strong performance, generating $11B in trading volume over 30 days and $47M in annualized fees.
Taken together, these factors suggest that larger-scale Trading Leagues could be an effective driver of volume and fees on dYdX. A short-term pilot, with the potential to evolve into a long-term program, could therefore be a strategic next step.
The Trading Arena platform provides the necessary infrastructure to execute these events efficiently and credibly, with built-in on-chain data validation, dynamic leaderboards, and multi-tier reward structures.
The proposed pilot allows the community to evaluate:
- The impact of the trading league on key performance metrics (trader growth, retention, and trading volume),
- The effectiveness of the Trading Arena as a scalable tool for ongoing initiatives, and
- The cost-effectiveness of competitive incentives compared to other trader incentive mechanisms.
If successful, this pilot could form the foundation for a sustainable, performance-based trader incentive framework governed by the community.
Reward Structure
To manage spend and align incentives with performance, we propose a tiered reward structure where larger prize pools unlock as trading volume increases. Since median weekly non-API volume on dYdX since July 1st is $493M, the following tiers use this benchmark to define clear growth-based unlocks:
| Weekly Non-API Volume | Reward Pool | Description |
|---|---|---|
| Below $550M | $100K | Baseline payout for sub-median performance weeks. |
| $550M – $700M | $175K | Moderate growth zone, approximately +20–40% above median. |
| Above $700M | $250K | Full reward pool unlocked for strong performance weeks. |
For each tier we propose the following prize distribution based on P&L:
Tier 1: Below $550M (Total Pool: $100,000)
| Placement | Reward (USDC) | Total (USDC) |
|---|---|---|
| 1st | $20,000 | $20,000 |
| 2nd | $14,000 | $14,000 |
| 3rd | $10,000 | $10,000 |
| 4th–10th (7 traders) | $2,500 each | $17,500 |
| 11th–25th (15 traders) | $1,000 each | $15,000 |
| 26th–50th (25 traders) | $500 each | $12,500 |
| Bottom 5 by P&L (5 traders) | $2,000 each | $10,000 |
| Total | $99,000 |
Tier 2: $550M–$700M (Total Pool: $175,000)
| Placement | Reward (USDC) | Total (USDC) |
|---|---|---|
| 1st | $25,000 | $25,000 |
| 2nd | $20,000 | $20,000 |
| 3rd | $15,000 | $15,000 |
| 4th–10th (7 traders) | $5,000 each | $35,000 |
| 11th–25th (15 traders) | $2,000 each | $30,000 |
| 26th–50th (25 traders) | $1,000 each | $25,000 |
| Bottom 5 by P&L (5 traders) | $5,000 each | $25,000 |
| Total | $175,000 |
Tier 3: Above $700M (Total Pool: $250,000)
| Placement | Reward (USDC) | Total (USDC) |
|---|---|---|
| 1st | $40,000 | $40,000 |
| 2nd | $25,000 | $25,000 |
| 3rd | $15,000 | $15,000 |
| 4th–10th (7 traders) | $7,500 each | $52,500 |
| 11th–25th (15 traders) | $3,000 each | $45,000 |
| 26th–50th (25 traders) | $1,500 each | $37,500 |
| Bottom 5 by P&L | $7,000 each | $35,000 |
| Total | $250,000 |
Targets:
Generate $1B in incremental, non-API trading volume and achieve a 20% increase in new trader growth compared to October benchmarks.
Specification
- Program Overview: We propose a pilot weekly trading league program, starting on November 1, 2025, distributing up to $250K in DYDX per week to the winners. The weekly leagues will be held for four weeks. During the pilot program or shortly after, we will provide a report to the community about the performance of the program and, depending on the program’s performance, a proposal to continue the program.
- Funding Request: Based on the 7-day TWAP of $0.33 as of today, we will be requesting 3,030,303.03 DYDX from the Community Treasury for the prize of this program.
- Fund Management: The requested 3,030,303.03 DYDX from the Community Treasury will be sent to an address controlled by the Treasury SubDAO (dydx10azu6arkhqjfzvya6877neq86h2awp79m84w6q) for safekeeping. The Treasury SubDAO will send us the funds for the prize to be distributed to the winners, up to $250K per week.
- Reward Distribution Plan:
- Speed: Rewards will be distributed quickly, within 3 days of the finalization of each weekly competition’s results.
- Process: This expedited process is possible because the flow of funds will be handled directly from the Treasury SubDAO to the CLC, and then to the winners. This approach does not require a separate governance vote for each weekly payout, allowing for a swift and efficient distribution of prizes.
- Unused Funds: Any unused funds could either be retained for future trading competitions or remain with the Treasury subDAO for inclusion in the community staking program.
Next Steps
We invite the community to provide feedback on this proposal, if there is no significant objection, we are aiming to submit the on-chain proposal on October 27, 2025.
FAQ
Q1. Will this be hosted on the existing dYdX Trading Arena?
No, in addition to being able to check rankings within dydx.trade, the CLC will also create a special website. Please refer here for the design image of the special site that CLC will create.
Q2. How will PnL be calculated?
Unlike the existing dYdX Arena calculation method, the following calculation method will be adopted.
(Current Equity - Net Deposit) - Equity at the beginning of the week
- PnL will be calculated and updated once a day, starting from the beginning of the week.
- Net Deposit refers to the difference between deposits and withdrawals during the period (Deposits - Withdrawals).
Q3. Why not add trading volume for prize criteria ?
Initially, we considered using only Profit and Loss (PnL) as the sole performance metric. However, based on valuable feedback from the community, we agree that incorporating trading volume as a criterion is a good idea.
This program will feature weekly competitions. The reward structure detailed above will be used for the first week. After the first week, we will analyze the results and key metrics to refine the competition structure for subsequent weeks. This iterative approach allows us to optimize the league’s format.
For example, while Week 1 may be based solely on PnL, Week 2 could feature a combination of PnL and trading volume. In Week 3, we might adjust the weighting of these criteria to better align with the program’s goals etc.
Revision Log
2025/10/22: 1.0.0 - Initial version posted on the forum
2025/10/23: 1.0.1 - Added FAQ
2025/10/23: 1.0.2 - Update Specification section to include reward distribution plan
2025/10/27: 1.0.3 - Update Q2. How will PnL be calculated part
2025/10/27: 1.0.4 - Added Q3 in FAQ section
2025/10/27: 1.0.5 - Updated DYDX request amount based on the latest 7-day TWAP and added the Treasury SubDAO address.
