dYdX Transitions to Public Benefit Corporation
Rebeca Moen Oct 18, 2023 13:15
dYdX Trading Inc. has updated its charter to become a Public Benefit Corporation on 17 October 2023, as announced by its founder, Antonio. This move aims at aligning the company more closely with the web3 community, promoting global economic and technological advancement through open-source and decentralized crypto asset exchanges. This transition, a first of its kind in the DeFi sector, enables dYdX to balance shareholder value with public benefit.
In a bid to realign its organizational structure with the broader interests of the web3 community, dYdX Trading Inc. has amended its charter to transition into a Public Benefit Corporation (PBC). This change was publicly announced on 17 October 2023 by Antonio, the founder of dYdX, through a series of tweets. The key objective behind this transition is to foster economic and technological advancements globally, especially by democratizing access to financial opportunities through decentralized and open-source crypto asset exchanges among other technologies.
Antonio divulged that dYdX's new status as a PBC will not alter its for-profit nature. However, it does enable the board and himself to focus not just on maximizing shareholder value but acting in the public interest. This strategic shift reflects a growing commitment to aligning with the builders, traders, and stakeholders within the web3 community, beyond just the shareholders. dYdX views this transition as an innovative step not only in product and technology but also in legal and organizational structure, marking a historic moment in the decentralized finance (DeFi) sector. This is noted to be the first instance where a major DeFi corporation has morphed into a Public Benefit Corporation.
The amendment to the charter articulates the specific public benefit that dYdX aims to promote. In Antonio’s words, “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, thus not solely concentrating on shareholder value.
Community responses have been largely supportive, with some urging dYdX to publish the exact wording of their charter as an additional step towards transparency. The notion of returning the fees from the previous version (v3) to adhere to the new charter's principles was also brought up by a community member. These interactions highlight the community's keen interest in dYdX's move towards a more open and aligned operational framework.
The company anticipates the dYdX Chain's open-source release, underscoring the pivotal role the v4 open source code will play in realizing their mission of democratizing financial access. The change is also seen as a response to the evolving global economic conditions, emphasizing the necessity for transparent, open, and permissionless financial products.
Image source: Shutterstock