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Economic Model

Unlike traditional L2s that generate revenue from gas fees, Status Network operates on a radically different paradigm: users and applications do not pay transaction fees. This necessitates alternative revenue sources to maintain and sustain the network. As gas fees trend toward zero and rollups move toward decentralization, the business model of L2s must shift from execution-based revenue (sequencer fees) to monetizing asset trading volume and yield-bearing total value locked (TVL) on the network.

Revenue Streams​

To achieve sustainability, Status Network derives revenue from the following sources:

  • Native Yield Commission: Assets bridged to Status Network (ETH and DAI initially) are rehypothecated into yield-bearing equivalents (stETH and sDAI). A portion of the yield generated (30%) is allocated to the network's operational costs.

  • Native DEX Swap Fees: Status Network features a native DEX where trading fees contribute to network operation. Native DEX liquidity providers can earn extra incentives from the native yield on top of the usual LP fees.

  • Premium Gas Fees: Users exceeding their free transaction quota must pay a premium fee, which is split between Status Network and RLN (the spam prevention mechanism), incentivizing fair usage and discouraging abuse.

  • Future Native Apps: The network will later introduce additional revenue streams, such as a lending market, NFT marketplace, and token launchpad, each contributing a percentage of generated fees back into the L2 operation.

This model ensures that Status Network remains economically sustainable while offering free transactions. By leveraging TVL and its associated native yield as well as transaction volume, Status Network aligns incentives between users, liquidity providers, and developers, creating a self-sustaining ecosystem without reliance on inflationary token emissions.