dYdX's Historic Transition to a Public Benefit Corporation: A New Chapter in DeFi

dYdX Trading Inc. announces its transformation into a Public Benefit Corporation (PBC) to align with the interests of the web3 community.
This shift reflects a commitment to democratizing access to financial opportunities through decentralized crypto asset exchanges and open-source technologies.

In a notable move to realign its organizational structure with the broader interests of the web3 community, dYdX Trading Inc. has made a significant amendment to its charter, transitioning into a Public Benefit Corporation (PBC). Antonio, the founder of dYdX, publicly announced this change on October 17, 2023, through a series of tweets. The central goal behind this transition is to promote economic and technological advancements on a global scale, with a particular focus on democratizing access to financial opportunities through decentralized and open-source crypto asset exchanges and other technologies.

Antonio made it clear that dYdX’s new status as a PBC will not alter its for-profit nature. However, this transformation enables the board and its founder to prioritize not only maximizing shareholder value but also acting in the public interest. This strategic shift underlines a growing commitment to align with the builders, traders, and stakeholders within the web3 community, transcending the interests of shareholders alone. dYdX sees this transition as an innovative step, not just in terms of product and technology, but also in legal and organizational structure. It marks a historic moment in the decentralized finance (DeFi) sector as the first major DeFi corporation to morph into a Public Benefit Corporation.

The amendment to the charter specifically outlines the public benefit that dYdX aims to promote. As Antonio explained, “The specific public benefit to be promoted by this corporation is building and supporting protocols that, and industry members who, promote and facilitate economic or technological advancement of the global community, including but not limited to the democratization of access to financial opportunity through open source and decentralized crypto asset exchanges and other technologies.” The new charter mandates the company to balance the interests of various stakeholders, not solely focusing on shareholder value.

The response from the community has been largely supportive, with some members urging dYdX to publish the exact wording of their charter to enhance transparency. There have also been discussions about returning fees from the previous version (v3) to align with the principles of the new charter. These interactions emphasize the community’s keen interest in dYdX’s move towards a more open and aligned operational framework.

dYdX’s Vision for the Future

The company looks forward to the open-source release of the dYdX Chain, underscoring the pivotal role that the v4 open source code will play in realizing their mission of democratizing financial access. This transformation is also seen as a response to evolving global economic conditions, emphasizing the necessity for transparent, open, and permissionless financial products.