Dex223 Revenue Model

What constitutes the income of DEX223 holders?

DEX223 publishes a yield flowchart for D223 token holders on the Ethereum network.
As shown in the chart, the yield structure is heterogeneous and introduces some new and unconventional directions for the DeFi sector. The core of the yield structure is the token lock-up contract. It is important to note this fact: only users who lock their D223 in a special smart contract have the right to a share of the revenue from DEX223 operations.

Source: dex223.io

The structure is divided into four main blocks:

1). Platform fees – This includes payouts from a portion of trading fees and listing fees. Similar to liquidity providers, D223 holders will receive payments in the tokens used for trading operations.

2). Other profits – Revenue that may not be directly related to DEX itself:

• Arbitrage – This element is in the planning and discussion stage, but  the idea is quite simple: DEX223 could launch its own bot for inter-exchange trades, with the income split between the platform and D223 holders. Arbitrage is a fairly common price-formation mechanism for DEXs. However, during arbitrage, liquidity providers and users with locked tokens may incur potential losses. Taking control of the arbitrage mechanism and distributing the profit may smooth out the negative effect of fund lock-ups.
• BP operations – Revenue from the operations of the bp4dex223dao block producer on the EOS blockchain. There is currently no information on how this part of the yield will be delivered—whether in EOS coins or in equivalent amounts of other tokens.
• Other operations – A reserved component for future revenue-generating operations. The DeFi sector's landscape constantly evolves, and new income-generating operations emerge. For example, some protocols establishing DAOs and decentralized treasuries often deposit part of their treasury into third-party yield protocols. It is logical that after its launch, DEX223 will strive to provide new incentives for D223 holders. Additionally, the updated roadmap includes plans to integrate AI Agents, NFTs, and traditional stock trading.

3). Airdrops – Token distributions on each new EVM chain where DEX223 is deployed, equivalent to the tokens locked in the D223 contract on Ethereum.

Example: User A has 5000 D223 on ETH locked in Dex223's smart contract. As soon as Dex223 deploys to the BSC chain the user gets 5000 bscD223 airdropped.

This generates additional income and creates another subtle market factor. Since only users who lock their tokens in the contract will participate in the airdrop, the issuance and supply in circulation on another EVM chain may decrease, potentially affecting the price. This fact may encourage holders to lock their tokens, which, in turn, will positively impact the market.

4). DAO governance rights – Locked tokens grant D223 holders voting rights in the DEX223 DAO. This can be considered an indirect benefit. Nevertheless, at the first stage, DAO membership already allows voting on:

• Changing commission rates
• Adjusting liquidity provider fees
• Setting margin trading parameters
• Voting on token status

The first three elements of the fourth block are straightforward. What is "token status"? A DEX is a system that allows any user to add liquidity in any tokens, including their own tokens for trading. On other DEXs, you may not see such tokens until you manually add their address in the token manager. In contrast, DEX223 uses an automatic listing system, and the token list is extracted from the listing contract. This mechanism makes projects more visible and accessible to users, but it increases the risk of counterfeit tokens, including those copying the logo and ticker of original tokens. To protect users, DEX223 will use a status system, assigning a specific status to each token and safeguarding users in the process. To prevent malicious use, control over this tool will be exercised by the DAO.

Source: Dex223 development report 04.04.2024

System balance

The use of deposit contracts with time-lock mechanisms as the core of yield protocols is already an established practice. Such a system allows balancing risks for the platform from users and protects users  from players holding large amounts of unlocked tokens. For example, other CEXs and DEXs may have large quantities of user tokens in their addresses, and they reasonably should not be entitled to income from the DEX223 rewards program. The very fact that users may demand their funds from these addresses at any time prevents these players from locking tokens for income, as reputational risks always outweigh the benefits.

After requesting tokens from the deposit contract, D223 holders will lose the right to a share of the income and the right to vote in the DEX223 DAO.

Conclusion

DEX223 offers both traditional DeFi yield elements and unique, previously unseen ones. Heterogeneous yield is primarily interesting for its diversification. When locking your funds, you trust the platform; thus, maintaining this trust requires as many incentives as possible.

Including several unrelated income sources in a single structure is very similar to traditional markets, where investment funds can hold assets from completely different industries, or you can buy indices containing both dairy producers and military helicopter manufacturers.

The "Other operations" component further emphasizes the platform's flexibility and the developers' adaptability. Providing information in the form of a flowchart is a simpler way to convey information and is likely targeted at new investors, especially since D223 is now traded on BitMart.

Buy D223 Tokens with Bitmart

 - - -

The views expressed are those of the author and do not necessarily reflect the views of Dex223. The content has been reviewed and edited by our editorial team to ensure accuracy and coherence. This article is for informational purposes only and does not constitute financial advice. Investing involves risk, and you should consult a qualified financial advisor before making any investment decisions. Original reporting sources are credited whenever appropriate and as required.