Bitcoin Forum

Looking at the latest numbers, centralized exchanges are still completely dominating the crypto space.

• CEXs (Binance, Bybit, Coinbase, etc.) are moving over $1 trillion in 24h volume.
  
• DEXs combined are doing just around $13 billion daily, barely 1% of CEX activity.

It’s a massive gap, even though DEXs are supposed to represent the “future” of trustless and permissionless trading.

I’m just wondering, why do you think DEXs are still so small compared to CEXs? Do you see them catching up someday, or nah?
And if you had to choose right now, would you stick with a DEX or a CEX?

CEXs offer a better user experience in every aspect except privacy and the majority of people do not care about privacy. CEXs have more financial and human resources to build more polished and user-friendly interfaces. They also offer more flexible solutions, you can easily buy a crypto with your card and you can also easily convert your cryptos into USD or in any other local currency and easily withdraw them to your bank account instantly. CEXs have less legal problems because they do not focus on their user's privacy, so they collect lots of data from you. This and many other things benefit CEXs to keep the highest share on the market.

Yes, no doubt that it's a massive gap but I thought I was just reading millions of volume in dexs but not. Billions of volume is still a lot.

IMHO, there was a point when DEXs are superior.

But because they're mostly targeted by exploiters and hackers, people move from there to CEXs which promises proof of funds and then strengthened security.

Even so, hacks from the biggest exchanges can be avoided and so they have to continue fighting for it.

No, I don't see Dex catching up with CEX, not now that regulation is giving CEX more security to function and building trust on investors investment. With regulation, lost funds due to hack are likely to be refunded easier. People like the feeling of government involvement in what they do because they feel more secured and backed by authority.

Also, another reason is that investors are human beings not AI, they want a system built on human 5 senses so that there is compassion, emotion and trace. The feeling of knowing who is having custody of your coins gives more confidence to CEX users.

CEX has a learners friendly interface that makes even a newbie able to navigate the platform of CEX more than Dex  Majorly, investors like to know that there is possibility of banning a cheater as penalty, like a third party escrowing funds which is what CEX primarily do for investors but this remedy system is most likely missing in Dex. So I really think Dex catching up with CEX is very difficult, not with regulation.

In addition to better user experience, and other minor things that have been stated by others, I think the main problem with DEX is that scammers are very active there and if you are not careful you will lose your money. Scammers can easily clone a token which if you don't look at the contract address carefully, you will lose your money to scammers. This is a major challenge with DEX, although this is smaller on magnitude compared to CEX where you can lose all your money if they are hacked or seized by the authorities.

Scammers are everywhere just that on centralized exchanges you will need to actually have certain conditions meet before you get your coin or token listed on the platform most at times you will have to pay the exchange before getting listed or most often the exchange hierarchy might have invested into the token or coin or there is someone with the exchange that has an affiliate with the coin and gets it listed and this doesn’t matter when they wishes to perform their scam. The reason why it is just rampant on DEX is because there is no huge amount needed to actually list a token on DEX and no threshold of certain volume before listen because it is decentralized. But getting involve into the scam here is not the issue of the DEX but the trader or investor who themselves fails to actually do proper research.

The major problem that distinguishes the DEX vs CEX is nothing more liquidity, the DEX usually lacks more liquidity than CEX who mostly have the heavy liquidity and during trading the essence of using a platform of huge liquidity is to actually avoid unnecessary losses and it is one of the major reasons why large transactions are done on platforms with huge liquidity than the others and it is the Clear distinction between the CEX and DEX

Apart from anonymity, decentralized exchanges have no advantage over CEX. It takes a long time to list the advantages of CEX, but I'll focus on the main ones:
- great liquidity
- no slippage
- transaction speed on DEX depends on the network bandwidth
- commission is lower

As mentioned above, I think this is just a superficial reason for people to avoid DEX, considering it doesn't take a genius to double-check whether the contract address they use is the right one or not. The obvious thing to do is avoid new tokens, wait for the team to publish smart contract details, don't connect to new exchanges randomly, and so on. It isn't like a new difficulty where you have to know about Solidity to tell that a contract is off.

There's no way DEX is going to catch up with CEX. One of the reasons CEX is miles ahead and will always be the go-to trading platform is because of the user experience. CEXs have simple UI, which makes it easy for anyone to understand and seamlessly carry out trades. Another reason is the liquidity. CEXs have great liquidity. There's hardly a time you would go to a CEX and not see active traders. However, the same cannot be said about DEXs because they've limited liquidity. Sometimes, you might place an order, and it could take forever to be filled.

The numbers really highlight how much convenience, liquidity, and user trust still favor centralized exchanges. DEXs have the idealistic appeal of trustlessness, but they often lag in UX, speed, and capital efficiency. Catching up is possible, especially as Layer 2s and cross-chain solutions improve, but for now, most traders stick with CEXs for sheer ease and volume. Personally, if I needed speed and liquidity and do some cashout via fiat Id go to my favorite CEX but for experimenting with DeFi and trustless protocols, i always go for dex. Also when we talk about airdrops? Should be better to play with these dexes.

Well, you can't use DEX to receive some fiat directly plus in reality we know that everyone who uses crypto aren't that well-versed into going the hassle of using a DEX. With CEX users can just buy and sell, withdraw it on their preferred wallets, plus liquidity is hovering into CEXs.

I do think with CEX especially the notable ones like Coinbase or Binance is the hub used by users as it's regulated and the comfortable of having Customer Service to rely on whereas DEX don't have that. However, if you're not new to crypto I think you can go hybrid, and probably most users in this forum will agree.

AFAIk, For tokens with a burning mechanism, CEXs still have slippages, but they're not visible on the account, the value displayed in our account is after deducting taxes and burning (if such a mechanism exists). The rest of what you said is true, CEX is the main choice because the liquidity is maintained by the CEX system and guaranteed safe by the provider as long as the coin is still listed.

You're right, liquidity is a major reason that sets Centralize Exchange apart from Decentralize Exchange. DEX lacks liquidity and it's the reason why many traders always choose to make use of CEX and if DEX doesn't try to improve their liquidity people will still choose CEX over them. Also having higher trading volume attracts people to CEX. There are other services that CEX offers that attracts people to CEX like,  Support of use of fiat and also having user friendly interface for easy navigation and so on. Decentralized Exchanges have their own advantage too but it's not enough to compete with CEX, they improved a bit compared to before but they need to do better to stay as relevant.

It's simple, CEX came first and it is more trusted. If you ended up with DEX starting first as the way to trade then we would probably say "why would I give my money to some company to keep it?" but CEX came first.

Secondly, we are talking about trust, DEX ones are seen to be broken before, hacked, and while CEX did too, there was someone at the top of it, look at what happened with some exchanges recently that stole from people, the CEO's are all in jail, so we have law on our side, not with any DEX.

When you also consider you can put fiat into it, and get crypto, trade crypto, go back to fiat to your bank account, you realize that you are not going to end up with anything that great, and should not be compared to dex.

I agree with the points made above: trust is the main factor that determines the choice of CEX.
When it comes to choosing between CEX and DEX, trust is often the invisible hand guiding most users.

Centralized exchanges may not fully embody the pure vision of decentralization, but they offer something far more valuable to the average user: the confidence that someone is held responsible for their funds. Most regular users want to know that in case of problems—whether it’s a failed transaction, a hack, or frozen withdrawals—there is not only an organization they can hold accountable, but also real people behind it. Legal entities that can be stripped of everything, forced to compensate users for damages, and even punished severely, if necessary.

While DEX promise self-custody and full control, this independence is somewhat questionable—because it places the entire burden of risk mostly on the user. For many, especially beginners, the idea of managing private keys, double-checking smart contracts, or dealing with scammers feels overwhelming.

CEX, on the other hand, provide not only customer support but also insurance funds, strong backing from regulators, and simply the feeling that “someone’s got your back” if things go wrong.

In the end, people don’t just trade assets—they trade peace of mind. And until DEX can replicate that sense of safety, CEX will remain the default choice for the majority.

One good reasoning I could come up with as regards this DEX vs CEX discussion is that CEX is more easy to use with fast rate of transaction and speed and it of course requires KYC which not only protects the user from other users, but also the user from themselves.

CEX carter mainly for everyday average and newbie users, while DEX is for oldies, crypto natives, more experienced, risk-tolerant, and DeFi users who know so well about privacy, self custody, unrestricted and access without permission and actually need it to secure their wealth because they understand crypto currency indepth and can adhere more closely to its principles.

If I recall it right, there was a point in the past that DEXes were the big things. It's real and that's thanks to Ethereum and dApps and other ERC20 tokens during the ICO/IEO days.

But I think that because of how users accessing them made it hard for the most. With the high network and transaction fees, I think it died down the DEXes.

A transfer of few bucks requires a lot in Ethereum for gas fees before. That is one of the reasons why they're no longer preferred by many even if the fees have dropped a lot for most networks or chains.

I don’t know where you got the $1 trillion number from. From the data on Coingecko, you could only arrive at that number if you combine the CEX volume and derivatives volume, but the derivatives section includes exchanges like Hyperliquid, Aster, and Lighter.

There is still a large gap in favor of centralized exchanges, but DEXs still have billions in volume, which is nothing to be ashamed of. Binance has had a lot of success with their Binance Alpha product and Coinbase also started integrating DEXs, so the DEX volume will only keep getting bigger.

Aside from the reasons mentioned, a lot of these CEXes also splurge money on promotions—much bigger than DEXes usually. As with any other businesses, PR/marketing makes a huge difference when expanding your reach. In addition, most tier one CEXes have been around for soo much longer, which also gives them an edge.

It'd be pretty difficult to flip CEXes at their top spot, though perhaps in the coming years DEXes/pseudo-dexes could take more market share.

I'm thinking of any reason as to why because TBH, it's a bit surprising as well, but what I think is:

1. The user experience from using a CEX is far better than that of a DEX.
2. Trading volume might be another reason because most of the traders always want to trade on a coin that's considered as "liquid" or has a high trading volume.
3. Marketing and Shilling. This I don't know, but I've seen many people talking about exchanges like Binance, Bybit, and some are even shilled even here in the forum like Bitget.

Well, with Perp DEXes becoming the hype currently, this at least lowers the gap between CEXes and DEXes when it comes to trading volume, but will they catch someday? I don't think so because many prefer using CEXes for various reasons despite of submitting their personal information to them. As for me, I'm using both, but I'm more of a CEX user and trader. :)

Because people talk a lot. And do very little.

People say wow Bitcoin is all about no middlemen, but then they don't wanna hodl and remember private keys they wanna go get more yield. Stash and stake and earn APY, and then earn more from the lock term.

Its like this forum. Of 10 people in Trading Discussion, maybe 1 is a real trader.

Of 10 people posting in gambling subforum maybe only 1 ever place a real bet on the games they're talking about.

Of 10 people 'supposedly in Bitcoin', I bet you 9 never even signed a transaction. They want the easy no brainer yield.

DEXs are complicated to use for many people. I can easily add funds to my Binance account with my card without worrying because it's done officially. I can also use their P2P trading, where I know that users are KYC verified and if there is a problem, I'm on a centralised platform with support that will take care of everything if something goes wrong. DEX requires users to manage their own wallet and transaction fees. They also have liquidity disadvantage. CEXs shine in these problems, they offer more managed and automatic services with the highest liquidity.

People prefer managed and automated services over custom control.

13 B volume is too low that I don't think it's the right data because even hyperliquid alone is 15B, add that with avantsi and aster, maybe it will sit around 50B for daily trading volume.
DEX isn't as liquid as CEX but they are still on early phase and people seems to really like it so they will grow eventually.

Too early to judge whether DEX is just a fad or not because it's still growing.
On the other hand, CEX has been here for more than a decade already. Unfair comparison.

What makes the CEXs dominate the crypto world is a combination of convenience and widespread advertising. Platforms like Coinbase, Binance and Crypto.com have been aggressively advertised for years and I find it pretty normal for a crypto noob to choose such platforms instead of any decentralized exchange platform. DEXs usually don't have big advertising budgets, so they rely on referral marketing and positive reviews on social media. Regulatory uncertainty around the DEX platforms is also a major risk. At some point, all DEXs platforms will be forced by the authorities to impose KYC policies. Being not-so-strict about KYC is what makes the DEXs more appealing than the CEXs.

Fear of self custody is a thing and you'd be surprised how many people are out there who never touched a self custody crypto wallet but owned good amount of cryptos.
If a people got a fear of self custody using DEX is out of the question, not to mention the intimidating UI since they are used to web2 instead of web3 with wallet logins, etc.

Or maybe, they just want to let the responsibility of making sure the funds safe and tax report easier by using CEX.

Yes, the OP provided really outdated data. According to the Coinmarketcap rating, the daily turnover on the Aster exchange alone is about $100 billion. For comparison, the trading volume of the Aster exchange is commensurate with the trading volume of the Binance exchange, which is the largest among all CEX. Although this is easily explained by the fact that Stage 2 ends tomorrow and traders are waiting for the rewards from the exchange, which were previously announced by the team.

https://i.ibb.co/QG6xrZd/23.jpg (https://imgbb.com/) https://i.ibb.co/ksnD4GtB/025-10-04-164035.jpg (https://imgbb.com/)

It is an impressive trading volume for a very young Perp DEX like Aster but there are less trading pairs on Aster compares to what Binance provides for now. If Aster can add more trading pairs and expand to more pairs on non-BSC chains, the Perp DEX can grow very fastly when more people will join it.

It seems Perp DEX prioritizes BSC chain while is kind of against tokens on ERC20 chain. I can understand it but it will limit people choices and also restrict total users Aster can get. Even two chains compete with each other, I believe that if Aster turns to be more friendly with other chains especially ERC20 chain, this DEX will have very massive growth in coming months.

Because many even after knowing the importance of DEXs love to use CEXs for several reasons and the one I like it most is the security, I know what you will say after reading this, but listen to me bro first, the security on dex is good, they are also vulnerable to the hacks, but but, the cexs too, I am not talking about hacking or spamming, I am talking about the chance of recovery.

In cex the funds are secured but not as secured as in dexs, and in cex we can easily transfer funds, we can do trading, my main purpose is because I have to buy and sell.

It is clear that it was tampered with, I do not believe for one second that they had that much number. But on the other hand, I also realize that DEX is growing, it is not going to stay 1% for long, it is not going to be the main one, like we are not going to see a 50-50 or anything like that, we should be able to make it so that we can have a situation where we are getting a ton of attention to it but it would still be 5% or maybe if they are lucky 10% that would be it.

That is why we should not be able to really see what this is going to be, it's just not something we can assume to be doing great. So that is why the best we can move forward with is accepting CEX will stay as the best one and will not move any further.

The simple answer is that "most people do not care." I tell you, it's not the matter of lack of experience in most cases, because, as a case study, aside from keeping coins/tokens in a self-custody wallet, everybody I know, including myself trade with CEX. Most of these people are well-informed, yet they choose CEX.

This could be attributed to the convenience, cheap fees and the better business opportunities offered by CEX.

Not at all. Unless CEX becomes problematic, which I don't see coming.

I have been trading with CEX, I will continue with it, unless I have a good reason to choose in the future. Perhaps when I start trading with hundreds of thousands of dollars worth.

In addition to the reasons you mentioned, I would like to add that the popularity of CEX comes from its convenience and ease of use. Because users tend to prefer using something that is easy to use, has a friendly interface and provides a good experience instead of prioritizing privacy and high security. In this aspect, it is clear that DEX cannot compete with CEX, so it is not surprising that CEX is still the choice of the majority of people.

Even experienced investors like us who are tech savvy still tend to use CEX over DEX, let alone newbies.

As practice shows, decentralized exchanges can very easily attract traders to their exchanges by holding various events related to rewards. And a very good confirmation of my words will be DEX Aster, which today surpassed Binance by one and a half times in trading volume and reached a record high of $115 billion.