DEX 2.0: Profit-sharing protocols are turning users into owners (and CEXs into dinosaurs) | Opinion
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Let’s talk about centralized exchanges, or as I like to call them: Wall Street cosplaying their way into web3. These aren’t crypto-native platforms—they’re TradFi institutions in hoodies, playing dress-up while running the same old playbook.
For years, CEXs have perfected the art of fee collection—raking in billions in trading revenue while giving nothing back to the users who fuel their business. No tokens. No dividends. Not even a thank-you meme.
Binance, by far the top exchange by 24-hour volume, currently sees about $14.2 billion in normalized (!) trading volumes daily. The exchange’s standard fee for users who trade under $1 million a month is 0.1%. So, doing some quick math, that’s a daily revenue for Binance of roughly $14 million.
Their business model is deceptively elegant in its simplicity: you trade, they win. You lose (often), they still win. It’s like walking into a casino that charges you a cover fee, keeps your chips when you lose, and then asks you to tip the dealer for good vibes. The house never loses, and the players? They never get a seat at the table.
Enter DEX 2.0—the rebellious younger sibling with a cause. These next-generation decentralized exchanges aren’t content with surface-level decentralization or flashy multichain integrations. They’re doing something far more radical: reprogramming the economics of the exchange itself. Instead of building platforms where the house always wins, they’re building ecosystems where everyone wins. By distributing protocol revenue directly to users and liquidity providers, DEX 2.0 protocols are turning what was once a rent-seeking model into a community-owned, value-sharing engine. This isn’t just an interface upgrade—it’s a philosophical shift toward user empowerment.
Looking at examples
Two of the top-10 derivatives DEXs, GMX and dYdX, are currently setting a strong example for the category.
Take GMX. Its model allows stakers and LPs to earn a portion of the protocol’s trading fees, effectively turning passive users into revenue partners. This shift in incentives has helped foster a deeply loyal community, not just traders chasing token pumps, but stakeholders invested in the protocol’s success.
Another DEX 2.0 example would be dYdX, which is undergoing a similar metamorphosis, transitioning from a foundation-led model into a fully decentralized DAO where fees are redistributed and governance is truly community-led.
Meanwhile, emerging players like Pairs are pushing the boundaries even further, experimenting with streamlined incentive architectures designed to maximize alignment between builders, users, and liquidity providers (and that’s all I can say here!).
What unites these experiments isn’t the tech stack or tokenomics. It’s a simple, powerful idea: align incentives and watch the flywheel turn. Protocols that share value grow stronger. Builders get long-term users, not just yield-chasers. Traders earn real yield, not the kind of speculative APRs that evaporate in a week, but sustainable, fee-derived income.
And liquidity providers can stop acting like mercenaries hopping from farm to farm. Instead, they become co-owners, sticking around for the upside they helped create. That level of commitment can’t be bought with bribes—it has to be built with trust and shared value.
The tradeoffs
Of course, none of this is without tradeoffs. Profit-sharing at the protocol level isn’t as easy as flipping a switch. Regulatory clarity is still a far-off dream—no one can agree whether these revenue-sharing tokens are securities, loyalty points, or just really ambitious memes.
Designing against Sybil attacks is an endless cat-and-mouse game. KYC and compliance needs are growing, not shrinking. And every incentive system, no matter how well-designed, is vulnerable to gaming, manipulation, or outright exploitation. On top of that, building sustainable flywheels takes time. It’s not enough to simply distribute tokens and hope people stick around. Governance needs to be earned, incentives tested, and mechanisms constantly refined.
But despite all this, the DEX 2.0 model feels more honest. More aligned. More human. It gives users not just access, but agency—a real sense of ownership over the tools they use every day.
Because this shift isn’t just about flashier frontends or tighter spread execution, it’s a reimagination of what an exchange can be. This is the DeFi version of a dividend-paying stock, except here, the dividend is on-chain, and the shareholders are also the governors.
It’s a world where being a user means being a stakeholder. Where your loyalty is rewarded not with swag or platitudes, but with a tangible share of the upside. Ownership no longer requires being an insider—just participation.
And let’s face it: in a financial world where TradFi is racing to tokenize every asset class except their own profit margins, and CEXs are one exploit or mismanagement crisis away from becoming the next FTX, DEX 2.0 protocols are asking the only question that matters: What if the people who use the product actually owned the product?
Revolutionary, I know.
But maybe—just maybe—the original promise of crypto wasn’t just yield farming, leveraged bets, or memecoins. Maybe it was this: replacing extraction with participation. Realigning power away from middlemen and toward the people who actually create value. And in that world—in that model—everybody eats.
