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How do DeFi technologies make money?

Asked by Anonymous Sep 02, 2026 0 views 1 answers
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Answered Sep 02, 2026

Decentralized finance (DeFi) protocols and associated enterprises generate revenue through various programmatic mechanisms embedded within public blockchain smart contracts. Common revenue streams include charging minor transaction or swap fees on decentralized exchanges (typically ranging from 0.01% to 0.3% per trade), capturing interest rate spreads between borrowers and lenders on lending platforms, collecting liquidation penalties from undercollateralized positions, and taking management or performance fees on yield-aggregating assets. These automated mechanisms replace traditional banking intermediaries, distributing yields directly to liquidity providers or protocol treasuries.

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