dYdX won’t profit from v4 as it becomes public benefit corporation

dYdX Trading, the company behind one of the largest decentralized exchanges, will not earn trading fee revenue from its upcoming v4 platform as it has evolved into a public benefit corporation.

“dYdX Trading Inc. has officially updated its charter to become a Public Benefit Corporation,” said Antonio Juliano, founder and CEO of dYdX, said at

dYdX’s new legal structure comes just a day after rival Uniswap said it will charge a 0.15% fee to exchange certain tokens on its web interface and wallet. Juliano told The Block in an interview that dYdX had already received the updated charter approval on September 15, even though the company had been underway for some time.

“It’s just another step towards full decentralization,” he said. “And the biggest step on that path will be the full production release of dYdX Chain, and we are getting very close to that.”

dYdX becomes a public utility company

dYdX’s previous legal structure was a C Corporation (C Corp) in Delaware, Juliano said. The new structure of the public benefit corporation still allows it to make a profit, but the company is legally required to do more than just maximize shareholder value.

While dYdX will not generate revenue from its v4 platform, it will continue to generate trading fee revenue from previous versions of its protocol, including v3, Juliano said. But he expects most, if not all, post-launch trading activity to move to the new version over time.

dYdX’s v4 platform is currently functioning on testnet and is expected to go live on mainnet in the coming weeks, Juliano said. dYdX v4 will be deployed on dYdx’s own Cosmos-based blockchain called dYdX Chain.

dYdX has been “highly profitable,” with six years of runway

dYdX has made money running some parts of its decentralized exchange, such as managing its order book, determining which new features to add, and managing the front end of its platform. With v4, the company will no longer manage these features, as the dYdX Chain will be managed by third-party validators and entities, Juliano said.

Upon the launch of the dYdX Chain, trading fees will go from users to node operators and token stakers on the network, he added.

On the loss of potential trading fee revenue from v4, Juliano said that dYdX “has been very profitable over the last few years to the point where we currently have over six years of runway.” And that it is now focused on complete decentralization of its platform.

“Effectively, we can now operate in the public interest, and that public interest is what we have been saying in our missions for some time, to democratize access to financial opportunities, especially through open source software,” Juliano said.