DEXs Grew 550% This Year While CEX Competition Heats Up

The DEXs grew 550% this year according to new research by Chainalysis which revealed that the CEX competition is only heating up as we can see more in our latest cryptocurrency news.

The Defi sector saw a huge amount of money flowing onto its ecosystem this year and much of the trading activity on DEXs grew 550% and outpaced the trading volumes on popular exchanges as per the new data from Chainalysis. The report outlined a strong competition amongst centralized exchanges with traders seeking more platforms to trade amid the crypto boom. The transaction volume on the crypto exchanges increased a little over the year and while it is not constant, it shows a huge upward trend.

Centralized exchanges were outpaced by DEXs with huge protocols like Curve, Uniswap, PancakeSwap, and more, surging by about 55% during the first two quarters of the year. Decentralized trading platforms were the most active exchanges compared to other business models in the first quarter of 2019. The charts show comparison against other business models such as OTC derivatives, CEXs, and high-risk exchanges. In the first quarter of the year, we saw centralized exchanges competing strongly as the crypto market boomed. The number of active exchanges started to flatten later on with retail giants like Binance, Coinbase, Kraken and led the market. There isn’t a reason why the curve flattened out but availability plays a huge role n the platform’s survival rate:

“This could be for a number of reasons. Perhaps new users are more likely to hear about bigger exchanges, and therefore flock to them when they decide to buy their first cryptocurrency.
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 Or, perhaps bigger exchanges’ superior liquidity allows them to attract the biggest traders. Our analysis suggests that the number of unique crypto assets available plays a big role in exchanges’ survival rate during the time period studied.”

The number of DEXs and OTC brokers surged starting from Q1 2019 and the Defi activity during 2021 and eclipsed activity on centralized platforms with the total value from DEXs going from $10 billion last year to an ATH of $368 billion. The entire Defi sector is now seeing a huge boom with more crypto-native institutions tapping into the system and on the contrary, the institutionalization of BTC made it less attractive to other traders. The DeFi sector is offering a wide range of technological innovations to serve the market with corporations are trying to test Defi technology.