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Everytime I've used a bridge like Polygon and Aztec, all they charge are gas fee transactions to make the transfers and lock-up conversions between layer 1 and layer 2. Bridges therefore are nothing more than smart contracts. Where do these protocols get their revenue as a business then?

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At the moment, none of the bridges collects fees because it is s a loss-leading tactic to take market share. They are most VC funded have treasuries so that they can afford losses for a long time.

When you have amassed a sufficient amount of users, you can turn on the fees. See Uniswap v3 as an example.

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  • So neither Polygon bridge nor Aztec Connect earn revenue, despite having high traffic? Can't find any information.
    – user610620
    Dec 10, 2022 at 11:27
  • As those are third-party commercial products, it's better you ask the author of those products because they are the only ones that can give answers about their current and planned fee models. If you cannot find information they have support staff whose job is to answer your question. Dec 10, 2022 at 11:29
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  1. through transaction fees. When users make transactions on a layer-2 network, they often have to pay a small fee in order to cover the costs of running the network and incentivize network participants to process the transaction. These fees can be collected by the protocol or bridge and used to generate revenue.
  2. layer-2 bridges and protocols can earn revenue is through staking. Many layer-2 networks use a staking model, where users can earn rewards by locking up their assets and participating in the network's consensus process. These rewards can be distributed to the protocol or bridge as a form of revenue.
  3. just like the answer you accepted, some layer-2 networks may also earn revenue through grants, investments, or other forms of funding from third parties. This can provide additional resources for the protocol or bridge to continue developing and improving the network.
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  • What are some layer-2 networks that use a staking model
    – user610620
    Dec 11, 2022 at 10:44

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