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Operators of centralized cryptocurrency exchanges (CEX) stated that they are satisfied with the increase in trading volume on decentralized exchanges (DEX) because the latter’s liquidity is still insignificant and cannot cause large-scale user migration. Most CEX operators also insist that the liquidity of DEX is extremely unlikely to exceed its own liquidity within 2 years.
When the fast-growing Defi ecosystem caused an increase in the transaction volume of DEX applications, CEX platform operators made comments. Uniswap’s monthly trading volume surpassed Coinbase in September, highlighting this growth.
As the survey data conducted by cryptocompare.com shows, CEX operators acknowledge that the transaction volume on DEX is growing, but they have put forward different reasons for this happening. First of all, survey data shows that among the 26 operators who responded, about 46.2% or 12 “believe that the anonymity provided by DEX is the main reason for users to conduct transactions on DEX.” About 19.2% (5) of the people think The self-custodial function is the secondary driving force of transaction volume on DEX.
At the same time, four CEX or 15% of respondents said that production growth is another driving factor, while only two exchange operators believe that the lack of third-party operators is the reason for users to buy DEX in large numbers.
However, on the other hand, respondents believe that “liquidity and legal compatibility are the two main reasons why users prefer CEX over DEX.”
When asked about the possibility of DEX tampering with CEX in liquid stocks, more than 70% of people believed that this would not happen soon. the survey suggests:
Exchange operators believe that in the next two years, deeper liquidity will undoubtedly be a competitive advantage. More than 70% of respondents believe that DEX liquidity is impossible or almost impossible to exceed CEX liquidity within 2 years.
Interestingly, survey data shows that 40% of respondents said that “they are actively building or may build DEX in the near future.”
Regarding user experience (UX) issues, respondents did not pay much attention to the prospects of CEX. According to the survey results, only “57% of the respondents believe that DEX is unlikely or will not have a better user experience within 2 years.” Only 11% of the respondents believe that DEX will have a better user experience than CEX within 2 years. Good user experience.
At the same time, the survey pointed out that as more and more digital asset exchanges are launched, “the issue of the legality of the trading volume obtained by these upstarts is being raised.” Some analysts predict that weaker exchanges will be driven out through mergers and acquisitions or competition. The number of exchanges will fall.
Regarding this topic, cryptocompare.com shows that opinions are almost divided, because 42.3% of respondents expect this number to increase in the next two years, while 46.2% of respondents expect this number to decrease. In terms of fees, “65% of exchanges expect transaction fees to decrease, while only 11.5% expect fees to increase.”
In the next two years, the issue of institutional investors entering the industry was almost unanimous, as 92% of exchanges were optimistic about the growth of trading volume.
During this period, institutional investors entered the industry.
What do you think will be the result of the competition between DEX and CEX within one year? Share your thoughts in the comments section below.
Picture Credits: Shutterstock, Pixabay, Wiki Commons, cryptocompare.com,
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