blockworks.co
A nonprofit organization that supports the dYdX protocol has secured 30 million in DYDX ($86 million) from the dYdX community treasury following the latest DAO vote.
The dYdX Foundation is a Swiss entity designed to support the growth of the dYdX protocol ecosystem through community and developer engagement, and also maintaining decentralized governance.
This latest fundraise will be used by the foundation to hire and retain talent, while simultaneously scaling the dYdX chain.
In an interview with Blockworks, David Gogel, the vice president of strategy and operations at the dYdX Foundation, said this latest community fundraise comes after two and a half years of operation.
“We had about six months of runway left, and the goal here was to raise more funding to extend our runway and continue supporting the dYdX protocol,” Gogel said.
When the dYdX Foundation was first established, it was given 8.7 million DYDX tokens to grow and sustain itself.
“Unlike other foundations in the ecosystem that really manage the community treasury or have a very sizable balance sheet, we were very nimble and focused on having an impact with a smaller capital base,” Gogel said.
The latest ask for $30 million is equal to around 4% of the 253 million tokens which remain in the dYdX community treasury.
“It’s a small sliver of what’s there, but very impactful for giving the foundation a lot of runway,” he said.
It is important to note that the dYdX Foundation, unlike other foundations in the crypto ecosystem, does not hand out grants to ecosystem projects. This decision was intentional, Gogel said.
“The grants program is run by the dYdX grants SubDAO,” he said. “Our focus is much more on enabling communities, supporting developers and decentralized governance and really being helpful to different stakeholders in the ecosystem.”
The proposal drew in 85.4% of all DYDX governance token holders, with 98% of voters choosing to vote in favor of the proposal.
Majority of the budget will be allocated to salaries, bonuses and other employee-related benefits. The foundation estimates that over the next year, it will hire four new employees to support its growth.
Other expenses include marketing, business development, growth, legal and accounting, just to name a few.
“Ultimately, with these three years of runway, we want to continue to hire and retain the best team, give our team visibility and some level of job security. Our goal is to get 18 months of runway in cash to be able to cover our fiat operating expenses,” Gogel said.
He added, “Beyond that, we’re very focused on making sure that the foundation doesn’t impact the token’s price, and we’re looking at a progressive sale as well as staking a portion of those tokens to validators and contributing to the network’s security.”