HumidiFi Profit Model Under Fire as Solana DEX Giant Plans ICO

Source: CryptoNewsNet Original Title: HumidiFi Profit Model Under Fire as Solana DEX Giant Plans ICO Original Link: HumidiFi sits at the center of Solana’s trading activity, controlling nearly 50% of total DEX volume. That dominance usually signals strong revenue. However, a new debate now questions whether the platform actually makes money. The concern started after a Meteora community member publicly challenged the reason behind HumidiFi’s upcoming ICO, suggesting that the token launch points to a simple truth: the protocol may be unprofitable under its current fee structure.

According to the criticism, HumidiFi charges fees as low as 0.001% or less. That level helps attract massive trading volume, yet it also leaves little room to absorb losses from hedging, rebalancing and impermanent loss. As a liquidity provider, the critic warned that even 0.04% fees struggle to stay profitable in today’s market, and that impermanent loss eats most profits even at 0.02% fees. With HumidiFi operating below that level, there are doubts about how the protocol can stay sustainable without outside funding.

Why Huge Volume Does Not Guarantee Real Revenue

Many traders assume high volume equals high profits. That logic does not always hold in DeFi. Prop AMMs work on tight quotes. Tight pricing pulls in flow, but it also increases exposure to impermanent loss. Low fees and tight quotes help HumidiFi dominate Solana volume. However, those same mechanics drain returns for liquidity providers over time.

The protocol may grow in activity while still bleeding at the base layer. Critics also rejected claims that HumidiFi earned $3 million in fees last month, stating that the figure lacks on-chain proof and does not align with realistic fee math under the current model. This puts the ICO in a new light. Instead of funding expansion, some now see it as a tool to plug a revenue gap created by an aggressive fee strategy.

Supporters Still Back the Token Launch

Not everyone agrees with the bearish view. Some developers published bullish theses for the token ahead of launch, highlighting strong technical teams, deep Solana ties, and low initial float. The presale sets a $69 million fully diluted valuation, with only a small portion unlocking at launch. There is also no VC allocation, which pushes early exposure into public markets.

Supporters argue that Prop AMMs represent the next evolution of Solana DeFi. They believe HumidiFi’s growth curve justifies future valuation expansion, with some targets stretching as high as $350-$550 million FDV if execution holds. However, even supporters admitted that insiders retain supply control. If large holders choose to sell early, retail buyers could face steep pressure.

A Token Launch Surrounded by Risk and Unanswered Questions

At its core, the debate centers on one issue: Can ultra-low fees and tight Prop AMM pricing support long-term profitability? If not, the ICO may mark a structural turning point for the platform’s business model. So far, the team has not released detailed on-chain revenue data. The market now waits for proof. Either the protocol scales profit with its volume, or it proves that dominance alone cannot save thin margins. Currently, one thing is clear: the token launch arrives at a moment of maximum attention and maximum doubt, and in Solana DeFi, that mix often leads to volatile price discovery.