dYdX community introduces a Liquidation Rebates Pilot Program with a total reward pool of up to $1 million for liquidated traders

The dYdX community has approved a plan that was proposed in late November 2025 called the Liquidation Rebates Pilot Program. It has been touted as a reward system expected to mitigate the blowback from future liquidations, thereby encouraging liquidity and risk management.

According to a recent X post from dYdX, the plans for compensation have been approved via a governance vote and will be viewed as a measured experiment, which means it could still be refined further. 

The post revealed that 32 out of 42 Active Set validators and 112 accounts voted, with a 63.09% voting turnout in which there were 77.34% Yes votes, 2.55% No votes and 20.11% Abstain votes

More about the plans for compensation 

The Liquidation Rebates Pilot Program proposes a one-month trial starting on December 1, 2025, that will reward traders who experience a liquidation event with points and rebates, with rewards capped at $1 million in total.

Eligible participants can accumulate the described rewards via the pilot’s structured framework, designed to provide tangible value to active traders while maintaining a transparent process. 

The scheme’s total incentive pool of up to $1 million has been praised as a measured approach to supporting liquidity and risk management within the platform. 

dYdX moves on from October network outage 

dYdX’s plans to compensate traders come after the exchange was affected by a chain halt that grounded operations for about eight hours amid last month’s market crash.

It was in the post-mortem and update that followed that the exchange first floated the idea of voting on compensating affected traders with up to $462,000 from the protocol’s insurance fund.

dYdX has claimed that the October 10 outage stemmed “from a misordered code process, and its duration was exacerbated by delays in validators restarting their oracle sidecar services.” 

According to the DEX, when the chain resumed, “the matching engine processed trades/liquidations at incorrect prices due to stale oracle data.”

It further reported that no user funds were lost on-chain; however, some traders suffered liquidation-related losses while services were grounded during the halt. dYdX is not the only exchange that has taken proactive steps following the October 10 market crash; Binance’s response to the turmoil has also been commended. 

The market crash, which wiped out roughly $19 billion in positions and was the largest liquidation event in crypto history, also tested Binance’s trading services as the exchange had to deal with surging volatility, user concerns, and regulatory attention.

It was called out for technical glitches that prevented traders from closing out positions, and there were also interface problems that showed several tokens priced below zero, and the depeg of Ethena’s USDe. 

Binance refused to assume any liability for traders’ losses. However, it announced a $400 million relief initiative for affected traders, including $300 million in token vouchers and $100 million for ecosystem participants who were affected.

Binance also launched a $45 million BNB token airdrop to memecoin traders that suffered losses during the crash to “boost market confidence.” In total, the exchange pledged $728 million for traders affected by the sell-off.

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