DEXs Face Profitability Challenges: Astrovault Proposes an Approach

Monday, 28/10/2024 | 09:07 GMT by Ariel Shapira
  • The struggle with profitability for DEXs is due to hidden fees and variable transaction costs.
  • Astrovault integrates decentralisation and sustainability through its liquidity model.
DEX
DEX

Most people spend their lives striving for financial freedom, yet many find themselves constrained by institutions designed to safeguard money.

When we place our hard-earned cash in the hands of centralised entities, we surrender a degree of control over our finances. Once we conform to the norms of traditional banking, we become vulnerable to issues such as unexpected fees, limited access to funds, and the risk of institutional failure.

Decentralised exchanges (DEXs) offer a solution to institutional issues by providing greater autonomy and security over assets. By removing intermediaries, DEXs allow traders direct control of their finances, creating a transparent and accessible financial system where users trade without centralised institutions.

The Promise of Decentralisation

DEXs have the potential to democratise finance, allowing users to engage with crypto on their terms. However, the typical models these platforms follow have proven insufficient for achieving long-term sustainability. While the premise of permissionless banking seems enticing, the realities of operating a fully autonomous exchange are more challenging than expected.

The DEX Viability Challenge

Many DEXs have compromised core features in their pursuit of profitability. Hidden fees, reduced liquidity , and limited trading options have become common, undermining the decentralised principles these platforms were built on.

Additionally, the business model of many DEXs poses challenges to profitability. Unlike centralised exchanges that generate revenue through user fees and spreads, DEXs rely heavily on transaction fees. These fees can fluctuate, often falling short of covering operational costs, making long-term sustainability difficult.

This raises the question: how can DEXs develop sustainable business models without sacrificing their decentralised appeal?

Can a DEX Seek Returns?

As DEXs continue to grow, it can be difficult to distinguish advanced platforms from those following trends. Astrovault stands out by focusing on building long-term liquidity through its own protocol-generated resources.

By creating a DEX that can generate returns and keep itself profitable, Astrovault showcases an alternative to two issues. One alternative it provides is to the standard DEX infrastructure that many decentralized projects follow—a model that ultimately leads to difficulties in maintaining liquidity and keeping projects afloat.

More broadly, a DEX that can run on its own accord sets the stage for a true alternative to the traditional banking ecosystem, retaining DeFi’s original purpose sustainably.

This approach reduces reliance on external providers, strengthens the platform, and gives users greater control over their assets. By maintaining its decentralised principles while achieving profitability, Astrovault sets a new standard in the DEX space, showing that sustainable growth and decentralisation can coexist.

Without key tools and infrastructure that is built to last, there’s no incentive for people to switch from what they’re already accustomed to. So, DeFi developers must take strides to do things differently.

In the long run, Astrovault’s DEX model helps achieve a sense of security for individuals ready to meaningfully transition to growing wealth or just maintaining their finances in a decentralized way.

Most people spend their lives striving for financial freedom, yet many find themselves constrained by institutions designed to safeguard money.

When we place our hard-earned cash in the hands of centralised entities, we surrender a degree of control over our finances. Once we conform to the norms of traditional banking, we become vulnerable to issues such as unexpected fees, limited access to funds, and the risk of institutional failure.

Decentralised exchanges (DEXs) offer a solution to institutional issues by providing greater autonomy and security over assets. By removing intermediaries, DEXs allow traders direct control of their finances, creating a transparent and accessible financial system where users trade without centralised institutions.

The Promise of Decentralisation

DEXs have the potential to democratise finance, allowing users to engage with crypto on their terms. However, the typical models these platforms follow have proven insufficient for achieving long-term sustainability. While the premise of permissionless banking seems enticing, the realities of operating a fully autonomous exchange are more challenging than expected.

The DEX Viability Challenge

Many DEXs have compromised core features in their pursuit of profitability. Hidden fees, reduced liquidity , and limited trading options have become common, undermining the decentralised principles these platforms were built on.

Additionally, the business model of many DEXs poses challenges to profitability. Unlike centralised exchanges that generate revenue through user fees and spreads, DEXs rely heavily on transaction fees. These fees can fluctuate, often falling short of covering operational costs, making long-term sustainability difficult.

This raises the question: how can DEXs develop sustainable business models without sacrificing their decentralised appeal?

Can a DEX Seek Returns?

As DEXs continue to grow, it can be difficult to distinguish advanced platforms from those following trends. Astrovault stands out by focusing on building long-term liquidity through its own protocol-generated resources.

By creating a DEX that can generate returns and keep itself profitable, Astrovault showcases an alternative to two issues. One alternative it provides is to the standard DEX infrastructure that many decentralized projects follow—a model that ultimately leads to difficulties in maintaining liquidity and keeping projects afloat.

More broadly, a DEX that can run on its own accord sets the stage for a true alternative to the traditional banking ecosystem, retaining DeFi’s original purpose sustainably.

This approach reduces reliance on external providers, strengthens the platform, and gives users greater control over their assets. By maintaining its decentralised principles while achieving profitability, Astrovault sets a new standard in the DEX space, showing that sustainable growth and decentralisation can coexist.

Without key tools and infrastructure that is built to last, there’s no incentive for people to switch from what they’re already accustomed to. So, DeFi developers must take strides to do things differently.

In the long run, Astrovault’s DEX model helps achieve a sense of security for individuals ready to meaningfully transition to growing wealth or just maintaining their finances in a decentralized way.

About the Author: Ariel Shapira
Ariel Shapira
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Ariel Shapira is a father, entrepreneur, writer, and speaker.

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