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I wonder why someone develop a dex like uniswap, sushiswap etc. Why should I create one? How do I make profit by paying domain name, servers etc.? I've read docs and whitepapers. There's a fee, but that fee is reverted to liquidity pool, not to the owner/creator.

How does he/she earn money?

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How does uniswap creator take profit?

Uniswap itself made $11 million in their Series A funding round. (See here.) I believe they currently use this as their source of funds for operating and development.

However, the Uniswap contracts - at least in v2, I'm assuming also for v3 - do have a mechanism to take a fee from each trade.

In the Whitepaper, section 2.4 Protocol Fee:

Uniswap v2 includes a 0.05% protocol fee that can be turned on and off. If turned on, this fee would be sent to a feeTo address specified in the factory contract

This protocol fee would go to the treasury (creator). It would reduce the fee paid to the LPs from 0.3% to 0.25%. I believe this is currently turned off, with a view to turning it on in future.

(See: How is uniswap/sushiswap distributing their fees? for a discussion of the actual code.)


So how could you make profit if you created a DEX/AMM?

Turn on the per-swap protocol fee. Another option might be to include adding a one-time fee for the creation of a new trading pair/pool.

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  • Thank you. I'd read that part in the whitepaper, but I didn't realize that the protocol fee would go to the creator. Jun 4, 2021 at 19:58

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