DEX 2.0: How Profit-Sharing Protocols Are Disrupting Finance—And Why CEXs Should Be Worried

Forget loyalty programs—DeFi’s latest wave is turning traders into stakeholders. Profit-sharing protocols are rewriting the rules of engagement, redistributing value back to users instead of lining the pockets of centralized exchanges.

Wall Street’s playbook is gathering dust. While traditional finance clings to fee extraction, decentralized platforms are flipping the script. Users aren’t just customers anymore—they’re becoming owners.

The irony? CEXs spent years building moats with ’VIP tiers.’ Now they’re watching DEXs outmaneuver them with code that actually shares the wealth. Maybe next time they’ll try innovating instead of rent-seeking.

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.

Kelghe D’Cruz, founder of Pairs.xyz, is a builder and entrepreneur with over a decade at the frontier of digital assets and decentralized technologies. Before leading Pairs, Kelghe founded successful ventures in blockchain mining, education, and software development, delivering custom tech solutions for major institutions across North America. At Pairs, he brings a DEEP belief in real ownership, transparent finance, and decentralized markets—leading the charge to create a faster, fairer trading experience for all.