DEX cryptocurrency exchanges perform more on-chain transactions than CEX exchanges


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DEX cryptocurrency exchanges perform more on-chain transactions than CEX exchangesThe importance of decentralized finance (DeFi) continues to grow, as evidenced, for example, by the volume of on-chain transactions of decentralized exchanges (DEXs). It recently surpassed the number of transactions processed on traditional centralized exchanges (CEX), and according to the Chainalysis report, in 12 months, the volume of on-chain transactions on all DEXs amounted to 224 billion USD, which is much more than $175 billion in the case of CEX-that.

  • Cryptocurrencies Require Faster and Far More Transactions Than Traditional Markets, Says State of Web3 Report
  • The total volume of transactions processed by decentralized exchanges was 49 billion higher than the volume of centralized exchanges
  • DeFi is still developing, and to support this sector, increasingly modern and more robust solutions are needed.
  • Other similar and interesting articles can be found on the Comparic.pl homepage

DEX cryptocurrency exchanges process more transactions than their traditional counterparts

Draft State of Web3 report from Chainalysis shows that over the period April 2021 to April 2022, DEX on-chain trading volume was $224 billion, up $49 billion than in the case of CEX (175 billion).

This is no coincidence, as as of 2020, DEXs, along with the development of decentralized finance, are rapidly gaining popularity, providing much greater liquidity and price stability.

Put simply, trading volumes on centralized and decentralized exchanges may reflect broad-based outcomes of individual sectors and markets, and in 2021, which may suggest a moment of DeFi dominance.

The report states that DEX trading volume first exceeded CEX trading volume in September 2020, when the volume of on-chain transactions processed by centralized exchanges fell by 50%.

However, DEXs only peaked in June 2021, when DEX transaction volume peaked and was responsible for around 80% of on-chain transactions processed.

It should be noted, however, that most centralized trades take place outside the main chain via order books and it is impossible to capture all trades, which can skew the results.

NDE

5 Dominant DEXs

According to the report, most of the trading volume on decentralized exchanges comes from the top five platforms. These are Uniswap, SushiSwap, Curve, dYdX, and Protocol 0x, and they support around 85% of all DeFi and aggregate DEX trading volume.

For comparison, the top five CEXs – Binance.com, OKX.com, Coinbase.com, Gemini.com, and FTX.com – only run around 50% of all centralized on-chain exchanges.

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The reports give the probable reasons for the dominance of decentralized exchanges. One of them is the rapid growth of the DeFi sector, which means that most of them have yet to establish themselves to maintain a strong user base.

Moreover, DEXs are based on greater liquidity, attracting users with a guarantee of stable prices.

Whether decentralized platforms outperform traditional platforms largely depends on their ability to continue to offer cheaper trading fees while circumventing the regulatory hurdles that centralized exchanges face.

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