Have you ever wondered how crypto exchanges will actually generate revenue in 2025 and what the rise of decentralized perpetual trading means for your costs and opportunities?
How Do Crypto Exchanges Make Money In 2025?
This article breaks down the main business models used by centralized exchanges (CEXs) and decentralized exchanges (DEXs) in 2025, with a particular focus on perpetual trading and how the decentralized perpetual market is trending. You’ll get clear comparisons, practical KPIs to watch, and guidance on picking the right platform for your needs.
Quick snapshot: market context in 2025
The crypto market in 2025 is more institutional, more regulated in many jurisdictions, and much more technologically layered than in earlier years. You’ll see more activity on Layer-2 networks, hybrid architectures that combine centralized matching with on-chain settlement, and sophisticated tokenomics designed to capture protocol value.
Even with those changes, the fundamental ways exchanges make money remain recognizably similar — but the balance between revenue streams has shifted. You’ll want to understand which streams are growing, which are under regulatory pressure, and how decentralized perpetual protocols monetize while remaining noncustodial.
Two broad categories: CEX vs DEX (high level)
You’ll find most exchanges fall into two camps: centralized platforms that custody assets and control matching engines, and decentralized protocols that operate on-chain or on L2s with smart contract-based models. Each type generates revenue differently and exposes you to different trade-offs around fees, speed, custody, and transparency.
Centralized exchanges: what they can monetize
CEXs tend to monetize a broad set of services because they control custodial assets and settlement rails. You’ll see fees on trading, derivatives, withdrawals, fiat on/off ramps, custody, institutional services, margin lending, and data products. They can also internalize proprietary market-making, prime brokerage, and OTC services to capture spreads.
Decentralized exchanges: how they capture value
DEXs monetize through on-chain mechanisms: swap fees captured by liquidity providers and potentially captured by the protocol via fee switches, protocol-owned liquidity (POL), token economics that accrue value back to the protocol treasury, funding-fee capture in perpetually-settled markets, and MEV/value-extraction strategies. You’ll notice more layered revenue capture mechanisms as DEXs aim to fund development and reward stakers without central custody.
Core revenue streams across exchanges
Below is a table that summarizes the main revenue types you’ll encounter and who typically benefits.
| Revenue stream | Typical beneficiary | How it works |
|---|---|---|
| Spot trading fees | Exchange / LPs | Per-trade fee or % taken from swaps; sometimes maker/taker splits |
| Derivatives trading fees | Exchange / Protocol | Flat fees per contract, funding rate capture, position fees |
| Funding rates (perps) | Traders pay/receive; exchange may capture portion | Periodic payments between longs and shorts; some platforms tax or take spread |
| Spreads & internalization | Exchange | Exchange executes opposite side internally, capturing bid/ask spread |
| Liquidation fees | Exchange / Protocol / LP | Fees or penalties charged when positions are liquidated |
| Withdrawal / deposit fees | Exchange | Fixed fees to cover on-chain gas or fiat processing |
| Listing fees | Exchange treasury | One-time fees to list new tokens (under regulatory pressure in some places) |
| Staking / custody fees | Exchange / Protocol | Percentage of staking yield or custody service fees |
| Lending & margin interest | Exchange / Liquidity providers | Interest on borrowed funds for margin and lending desks |
| Token sales / IDOs / initial liquidity | Exchange / Protocol | Fundraising or allocation events generating revenue or treasury value |
| Data & API products | Exchange | Sell market data feeds, APIs to institutions |
| B2B services | Exchange | Custody-as-a-service, compliance tools, white-label exchange software |
| MEV & bribes | Protocol / Validators | Captured from reordering transactions or bribe systems (ve-token models) |
Detailed breakdown: Centralized exchange revenue models
You’ll find a variety of revenue levers inside centralized exchanges. Each brings different stability and regulatory exposure.
Trading fees and maker/taker models
Most CEXs still rely on per-trade fees. You’ll encounter tiered pricing where heavy traders enjoy lower fees. Maker taker models reward liquidity makers with rebates and charge takers more. For you, this means choosing a platform that aligns with your trading style: if you make limit orders you might benefit from maker rebates.
Derivatives fees and funding
Derivatives are a top revenue driver. You’ll pay trading fees on futures and perpetuals, and CEXs often capture part of the funding rate mechanism (or simply enable funding transfers between traders and keep a cut). CEXs also earn from position fees, rollover charges, and liquidation penalties.
Spreads and internalization
When a CEX acts as counterparty or uses internal market making, it can capture the spread between buy and sell prices. For you, spreads matter most on less liquid markets or during volatility.
Margin interest, lending, and rehypothecation
Exchanges generate interest by lending out your deposited assets to margin traders or institutional borrowers. They may also use excess assets for yield strategies. If you’re providing assets, read custodial terms — rehypothecation can expose your funds to counterparty risk.
Custody, staking, and managed services
Custody services for institutions, staking-as-a-service, and white-glove offerings are income generators. Institutions pay for compliance, custody proof, insurance, and SLA-backed custody access.
Fiat rails, payment processing, and subscription services
Fiat on/off ramps, payment processing fees, and subscription offerings (pro tools, advanced analytics, lower fees for members) provide more recurring revenue. You’ll often see subscription tiers that reduce fees or unlock API capacity.
Listing and promotional fees
Listing fees used to be a big source of revenue. By 2025, many regulators scrutinize this practice; some exchanges still charge, while others provide a revenue share or marketing partnership instead.
Institutional services and OTC desks
OTC desks, prime brokerage, and bespoke liquidity products generate high-margin revenue from large counterparties. You’ll get lower slippage and better pricing through these services, but they usually require KYC and minimum sizes.
Detailed breakdown: Decentralized exchange revenue models
DEXs and decentralized perpetual protocols operate with transparency and smart contracts, but they still need sustainable revenue to maintain development and incentivize participants. You’ll see a more composable set of revenue mechanisms.
Swap/AMM fees and protocol fee switches
DEXs collect fees on swaps that typically go to liquidity providers. Some protocols feature a fee switch: a portion of pool fees can be diverted to the protocol treasury, which funds development, buybacks, or token burns. If you stake governance tokens, you might receive a share of these revenues.
Funding fees and perpetual mechanics
Decentralized perpetuals charge funding rates between longs and shorts. Protocols can capture a portion of the funding or design mechanisms where LPs absorb or earn from funding. You’ll want to understand whether a protocol accrues funding revenue to token stakers or to governance.
Liquidation premiums and insurance funds
When positions are liquidated, protocols charge a liquidation fee and use insurance funds to cover bad debt. Larger insurance funds signal a more sustainable revenue model since they reduce the need to seize collateral or rely on emergency measures.
Token economics and value accrual
Many DEXs issue native tokens to reward users. The tokenomic design aims to convert protocol usage into token value through staking rewards, ve-token vote escrow (ve) models, buybacks, and fee distributions. You’ll need to judge whether revenue accrues to token holders, the treasury, or LPs.
Protocol-owned liquidity (POL) and GLP-style vaults
Some protocols manage their own liquidity pools (e.g., GLP) and earn swap and rebalancing fees, which flow into treasury or are used to reward token holders. This approach reduces dependence on external LP incentives.
MEV capture, bribes, and ve-token bribing
Protocols increasingly design mechanisms to capture MEV (miner/extractor value) and bribe systems (where governance token holders vote for fee distributions). If you stake tokens or participate in governance, you might benefit from bribe-driven income streams.
Layer-2 orderbooks and centralized-like matching
By 2025, many DEX perps operate with a hybrid model: orderbook matching on an L2 (low latency) with on-chain settlement. Those protocols can charge fees similar to CEXs while offering noncustodial settlement. For you, this often means lower gas costs and better UX with on-chain finality.
What’s new in decentralized perpetual trading (trends)
Perpetual trading has matured on-chain. Below are the key trends you’ll see shaping the space and affecting your costs and opportunities.
1) Layer-2 and cross-chain settlement become standard
You’ll trade perps on Optimism, Arbitrum, zk-rollups, and even Cosmos-based chains. This reduces gas, lowers latency, and makes perps competitive with CEXs on cost and UX. Cross-chain bridges and native cross-margining enable traders to use collateral across chains.
2) Hybrid designs (orderbook + AMM)
Some protocols implement hybrid models: on-chain perpetuals with off-chain matching or sequencer-based orderbooks. You’ll get the price efficiency of orderbooks with the transparency and settlement guarantees of on-chain contracts.
3) Capital efficiency improvements
Concentrated liquidity, GLP-like index pools, and cross-margining raise capital efficiency, reducing slippage and funding costs for traders. As a trader, you benefit from deeper liquidity and lower effective fees.
4) Funding mechanism evolution
Funding rate dynamics are more algorithmic. Instead of a single funding rate, you’ll see multiple intervals, tiered funding for different collateral types, and probabilistic funding smoothing that reduces short-term volatility in funding payments.
5) Risk engine sophistication and insurance models
Perpetual protocols now embed dynamic risk engines, better oracle aggregation, and larger insurance funds. This reduces tail risk and systemic liquidations. You’ll often have more predictable liquidation behavior and clearer on-chain metrics for safety.
6) Tokenomics and governance capture
Perp protocols structure tokens to accrue fees back to stakers or governance. Bribe markets (ve-based) are common: participants can lock tokens to gain voting power and capture fee allocations or bribes.
7) Liquidity aggregation and market-making automation
Aggregation layers route your orders to the deepest pools and integrate cross-chain liquidity. Automated market makers are increasingly sophisticated, using AMM+PMM hybrids to reduce slippage.
8) Institutional adoption and custodial hybrids
Institutions demand settlement finality and custody. You’ll see institutional-grade on-chain perps with optional custodial wrappers, compliance tooling, and API access — blending DeFi’s composability with CEX-level services.
Comparing user costs: perps on CEX vs DEX
Here’s a compact comparison of what you’ll typically pay and what you’ll get.
| Feature | CEX Perps | DEX Perps (on L2) |
|---|---|---|
| Fee types | Trading fees, funding spreads, withdrawal fees | Swap/position fees, funding rates, gas (L2 small) |
| Typical latency | Very low (centralized matching) | Low on L2; higher if fully on-chain |
| Custody | Custodial (exchange controls keys) | Noncustodial (you control keys) |
| Transparency | Opaque orderflow/pricing | On-chain transparency; observable funding & insurance |
| Capital efficiency | High via deep liquidity | Improving; GLP and concentrated liquidity boost efficiency |
| Liquidation behavior | Centralized engine, off-chain | On-chain rules, insurance funds visible |
| Incentives | Centralized discounts, VIP tiers | Token rewards, ve-bribes, fee distributions |
| Regulatory friction | Higher but managed | Lower in theory, but on-chain protocols face regulatory scrutiny too |
Fee types explained
Knowing fee types helps you compare quotes and evaluate long-term costs. Here’s a simplified table you can reference.
| Fee name | Who pays it | Why it exists |
|---|---|---|
| Taker fee | You (if you remove liquidity) | Payment for immediate execution |
| Maker fee/rebate | You (or you receive rebate if you add liquidity) | Incentivize limit orders |
| Funding rate | Longs or shorts (periodic) | Keeps perpetuals anchored to spot |
| Liquidation fee | Trader whose position is liquidated | Covers costs of closing risky positions |
| Gas fee | You | Pays for on-chain computation (L2 much lower) |
| Swap/AMM fee | Trader | Goes to LPs or protocol treasury |
| Margin interest | Borrower | Cost of borrowing collateral |
| Listing fee | Token issuer (indirect) | One-time revenue for exchange |
How decentralized perpetual protocols specifically make money
If you’re trying to understand a decentralized perpetual protocol’s sustainability, look at these mechanisms.
- Funding fee capture: Some protocols divert a portion of the funding to the treasury or to stakers.
- Protocol fee switch: Portion of swap or position fees flows to protocol rather than LPs.
- Liquidation penalties: A share of liquidation fees funds the protocol or insurance fund.
- Tokenomics: Emissions may be reduced over time and replaced by fee distributions to token stakers. Fees can buy back tokens or be used to reward locked token holders.
- POL & vaults: Protocol-owned liquidity (GLP-style) accrues fees and reduces reliance on external LP incentives.
- Derivative productization: Offering index perpetuals, leveraged tokens, auto-hedged structured products that generate yield.
- Licensing and B2B: Selling the protocol as infrastructure to other teams or blockchains for a share of revenue.
Regulatory and market risks that affect revenue
You’ll need to factor in legal and macro risks that shape revenue sustainability.
Regulation
Regulators are more active in 2025. CEXs must comply with KYC, AML, custody rules, and capital requirements. That increases cost of compliance but drives institutional adoption. DEXs face scrutiny around listing risky tokens, securities claims, and whether governance tokens constitute securities. These pressures can reduce high-margin activities like untethered listing fees and raise legal costs.
Competition and fee compression
As settlement costs fall with L2s, trading fees compress. Exchanges will need diversified revenue (data, custody, institutional services) rather than relying solely on volume.
Market volatility and funding rate fragility
Perp funding income can swing wildly with volatility. Protocols and exchanges need insurance funds and conservative risk models to protect treasury and maintain solvency.
On-chain risks
Smart contract bugs, oracle manipulation, bridge exploits, and MEV risks can cause losses and reputational damage. You’ll evaluate protocols on code audits, bounty programs, formal verification, and the size of insurance funds.
KPIs to evaluate exchange revenue quality
When you analyze an exchange or protocol, these metrics help you judge sustainability and risk.
| KPI | Why you should care |
|---|---|
| Revenue diversification | Less dependence on a single stream (e.g., pure spot volume) reduces risk |
| Net trading revenue per user | Measures profitability and stickiness |
| Portion of non-trading revenue | High recurring revenue (custody, subscriptions) is more stable |
| Insurance fund / TVL ratio | Indicates capacity to absorb losses |
| Fee capture rate | How much of on-chain fees flow to protocol vs LPs |
| Token treasury size & composition | Treasury in stable assets is less risky than concentrated tokens |
| Proof of reserves & audits | Transparency and solvency checks reduce counterparty risk |
| Smart contract audit status & bug bounty | Technical risk mitigation |
| Regulatory licensing / compliance posture | Affects long-term operation in key markets |
Practical tips for choosing where to trade perps in 2025
You’ll want to combine costs, safety, and functionality.
- Check total cost, not just spot fee: include take rates, funding, slippage, and withdrawal costs.
- Prioritize proof of reserves and large insurance funds if you prefer CEXs.
- For DEX perps, prefer protocols with transparent funding capture, strong treasuries, and audited contracts.
- If you trade on leverage, pay close attention to margin efficiency and liquidation logic; small differences in maintenance margin can impact P&L.
- Consider L2 liquidity and gas — some L2s will have more routed liquidity and cheaper settlement.
- Evaluate token incentives but do not assume yields are sustainable — token emissions often decline over time.
- Use institutional-grade custody or segregated accounts if you’re managing significant capital.
Emerging monetization ideas you’ll see more of
In 2025, exchanges increasingly innovate beyond classic fee models.
- Subscription models that give fee rebates, exclusive API access, and granular analytics.
- Data monetization through on-chain analytics, market microstructure feeds, and historical orderbooks.
- Custody and staking-as-a-service targeted at enterprises with compliance SLAs.
- MEV capture-as-a-service and sequencer revenue sharing on rollups.
- Tokenized securities and RWA (real-world asset) perpetuals, generating structuring and custody fees.
- Embedded finance partnerships: exchanges provide rails for fintech apps and earn processing fees.
The long-term outlook
You’ll see both consolidation and specialization. Large exchanges will bundle custody, institutional services, and data, while nimble protocols will specialize in on-chain experimentation: new fee switches, innovative tokenomics, and cross-chain perpetual products.
As perps become more capital efficient and on-chain UX improves, decentralized perps may attract more flow, especially for sophisticated traders who value noncustodial settlement and composability. However, CEXs will keep a large share of institutional and retail volume thanks to fiat rails, customer support, and compliance frameworks.
Conclusion — what this means for you
By 2025, crypto exchanges make money through a mix of traditional financial services (trading fees, custody, institutional desks) and on-chain-native mechanisms (AMM fees, funding capture, token economics). Decentralized perpetual trading is trending toward lower costs, higher capital efficiency, and hybrid architectures that close the performance gap with centralized venues. When you choose where to trade, evaluate total costs, transparency, and the revenue model sustainability — not just headline fees.
If you focus on the KPIs listed and understand the underlying fee capture models, you’ll be better positioned to choose platforms that align with your tolerance for custody risk, regulatory risk, and fee exposure.