Category: Award

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.