Our paper “Economic Analysis of Decentralized Exchange Market with Transaction Fee Mining” received the Best Paper Award from ACM BSCI 2022!

In this paper, we establish the DEX market with transaction fee mining and formulate our model based on the Hotelling model. Besides, we propose a two-stage game to formulate the interaction between DEXs and users and derive the equilibriums under different conditions of two parameters: the transaction cost difference and users’ stickiness. We show that though the service provider with a lower transaction cost can win the market, users’ stickiness can offset the market advantage. Thus, incentivizing users with transaction fee mining has become a crucial strategy in the duopoly competition.

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