CEXs and DEXs
in 2025: Insights from CoinGecko, Gate.
io, and PancakeSwap Leaders
Decentralized exchanges (DEXs) are growing in popularity among crypto users.
In the past year, DEXs have generated significant competition for centralized
exchanges (CEXs) that currently control trading.
In a conversation with BeInCrypto, industry experts from CoinGecko, Gate.io,
and PancakeSwap said they expect DEXs to grow in 2025 but also suggested that
CEXs will still be top contenders for newcomers.
The Success of CEXs and DEXs
Since the beginning of crypto trading, CEXs like Coinbase and Binance• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Binance have
dominated the crypto market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта. These exchanges currently amass over 300 million
users combined, offering high liquidity, and serving as easy-to-use platforms
for junior traders.
In the past year, DEXs have also gained momentum, providing users with a
decentralized alternative to trading . With a higher layer of security to
prevent fraud and less exposure to overregulation, DEXs challenge CEXs
control over the crypto market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта.
But despite the growing adoption of decentralized exchanges, CEXs are nowhere
near fading out.
“While DEXs are set to continue growing and evolving in
2025, CEXs will still play a pivotal role in the
ecosystem, particularly in onboarding new users. Both types
of exchanges have complementary roles, and together, they
will contribute to the overall growth and adoption of crypto in the coming
years,” said Chef Kids, Head Chef at PancakeSwap.
Sponsored
Sponsored
By leveraging these advantages, CEXs will continue to be in command of the
sector.
The Initial Grip of CEXs
Centralized cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта exchanges are platforms that store digital assets
on behalf of clients and enable them to trade, deposit, and withdraw their
cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта.
A central entity controls these exchanges and acts as an intermediary between
buyers and sellers. This entity is also responsible for ensuring that user
funds remain secure.
CEXs are the main avenue for cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта trading because they are easily
accessible for first-time crypto investors. Binance• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Binance, Coinbase, and Kraken are
among the most-used centralized exchanges .
According to Shaun Lee, a research analyst at CoinGecko, 2024 was a very
successful year for CEXs.
“Overall, CEXs have performed extremely well, with the top
10 showcasing volumes of over $2 trillion, over multiple
months in the year. In 2023, the top 10 CEXs only
managed to break above the $1 trillion mark once, in December,” he
said.
CEXs also tend to attract certain investors because they are subject to
rigorous regulatory oversight. This may act as a safeguard for traders looking
to take the first step away from traditional finance sectors.
The Rise of DEXs
DEXs function as a peer-to-peer• Телекоммуникации и связь » Компьютерная сеть » Интернет » Файлообменная сеть » Одноранговая сеть marketplace and don t rely on
intermediaries for crypto trading or custody over funds. Unlike CEXs, which
are regulated by a central entity and require users to undergo Know Your
Customer (KYC) processes , DEXs offer users the possibility to trade
anonymously.
Their popularity has recently surged, providing traders and
investors with a decentralized alternative to centralized
exchanges. Built on blockchain• Информационные технологии » Информационно-коммуникационные технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн
• Высокие технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн technology, DEXs eliminate the need for
intermediaries. Meanwhile, immutable smart contracts facilitate trading. DEX
and CEX Trading Volumes in the Past Week. Source: Messari .
These qualities have become increasingly appealing for traders looking to
prioritize security and autonomy when exchanging assets.
DeFi platforms have become competitive rivals for CEXs. Hyperliquid, for
example, is a layer-one blockchain• Информационные технологии » Информационно-коммуникационные технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн
• Высокие технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн for decentralized trading that enables
high-performance, expeditive trading with reduced fees. The exchange has
become widely adopted in the past year.
“Decentralized exchanges (DEXs) currently capture about 40%
of the market share, and they re steadily gaining
ground on centralized exchanges (CEXs). Looking ahead to 2025,
DEXs will have even more opportunities to grow. As DeFi
matures and adoption rises, decentralized exchanges will play
an increasingly central role in the broader financial ecosystem,” said Chef
Kids.
Sponsored
Sponsored
While CEXs and DEXs operate within different frameworks, both platforms
demonstrate signs of growing user adoption and success in the field.
Security and Overregulation Concerns in CEXs
CEXs tend to be scrutinized regarding security. Since the platform itself
holds the private keys to its clients wallets, it’s fully responsible
for the custody of user assets. Users become vulnerable to a potential loss of
funds in case of hacks or sudden exchange closures.
Kevin Lee, chief business• Экономика » Бизнес officer at Gate.io, explained that given their
centralized nature, CEXs need to continue developing mechanisms that increase
security and avoid potential security breaches.
“Centralized exchanges (CEXs) must prioritize security by
employing comprehensive measures that protect both users and
their assets. This involves utilizing advanced technologies
such as multi-signature wallets, cold storage solutions for
the majority of funds, and robust encryption to prevent
breaches. Additionally, regular third-party audits of security
systems and smart contracts are critical to identifying
vulnerabilities proactively. Exchanges should also integrate
real-time monitoring tools powered by AI to detect and respond to
potential threats immediately,” he said.
Most centralized exchanges use KYC procedures to comply with regulatory
requirements aimed at preventing illicit activities such as money laundering
and terrorist financing. Users must provide identity information, submit
supporting documentation, and await verification to fund their accounts and
begin trading on the platform.
As a result, these platforms are subject to extensive oversight. This may
involve stringent licensing requirements and compliance regulations imposed by
authorities, which can potentially limit CEXs ability to support
certain tokens or serve users in specific jurisdictions.
The Fall of FTX
Due to their centralized nature, several prominent CEXs, including FTX, Mt.
Gox, and WazirX, have experienced significant security breaches, resulting in
substantial financial losses for their users.
One of the most notorious cases is FTX, a prominent cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта exchange
that ranked third globally by trading volume in 2022. FTX went bankrupt in
November of that year amid allegations that its owners had embezzled and
misused customer funds.
At the time, reports emerged that Alameda Research, an affiliated trading
firm, derived a significant portion of its value from speculative
cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта investments. This prompted concerns among FTX customers, who
later withdrew their funds from the exchange en masse, sending FTX straight
into bankruptcy.
A Cautionary Tale
Sponsored
Sponsored
The subsequent collapse of FTX had a significant impact on the cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта
market and resulted in a 25-year prison sentence for then-CEO Sam
Bankman-Fried.
“These cases serve as reminders of the importance of
proactive regulatory compliance and sound risk management.
Exchanges must ensure their leadership adheres to ethical
practices,with robust internal controls to prevent systemic failures,” said
Lee of Gate.io.
FTX s sudden dissolution also raised concerns about the stability and
resilience of the broader cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта ecosystem, shaking investor
confidence. Lee added that central exchanges should use FTX as a reference
point for measures to avoid users financial losses.
“The high-profile incidents at platforms like FTX and
WazirX have taught the industry that transparency and strong
governance are essential for the survival of centralized
exchanges. These events underscored the importance of
maintaining strict separation between user funds and
operational funds to prevent misuse and mismanagement. They
also highlighted the critical need for regular
proof-of-reserves audits and public disclosures to foster user trust
and accountability,” he said.
Situations like these raise questions about the centralized nature of an
exchange’s operations. Experienced traders tend to adopt decentralized
exchanges to have full control over their crypto wallet keys.
DEXs and Liquidity Issues
One significant disadvantage of DEXs compared to CEXs is lower liquidity. This
lower liquidity can result in substantial price slippage , meaning that the
actual price at which a trade is executed may deviate considerably from the
expected market price.
Because most DEXs have a generally smaller user base and lower trading
volumes, it’s sometimes more difficult to find immediate counterparties for
trades.
“Liquidity is crucial for any DEX, big or small, as it
directly impacts trading efficiency, slippage, and the overall
user experience. For smaller DEXs, the lack of liquidity
can be particularly challenging, as it limits active traders
and available trading pairs,” said PancakeSwaps’ Chef Kids.
Since CEXs have access to a more extensive pool of buyers and sellers, users
tend to trade on these exchanges to avoid liquidity issues . Chef Kids says
DEXs must address this issue to become more competitive.
“For any DEX, more liquidity benefits the entire DeFi
ecosystem by enabling better pricing, attracting more users,
and ultimately creating a more vibrant and efficient market.
This, in turn, strengthens the DeFi space as a whole,
driving innovation and growth,” he said.
Addressing liquidity issues is crucial for DEXs to enhance their
competitiveness and contribute effectively to the growth and development of
decentralized exchanges.
Sponsored
Sponsored
Onboarding Obstacles for DEXs
DEXs often present a higher level of technical complexity than CEXs . Using a
DEX typically requires some familiarity with blockchain• Информационные технологии » Информационно-коммуникационные технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн
• Высокие технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн technology since it
involves using compatible wallets and the proper management of private keys.
This level of knowledge can present barriers for crypto newcomers trading on
exchanges for the first time.
“The complexity of self-custodial wallets and bridging still
presents a significant barrier for the average user, making
mass adoption of DEXs challenging. To reach a broader
audience, DEXs must simplify and make the user experience more
accessible,” Chef Kids said.
This factor alone makes CEXs more appealing to junior traders.
“CEXs will remain a crucial part of the crypto ecosystem,
especially when driving broader adoption. For many newcomers,
centralized exchanges offer the most straightforward entry
point, intuitive interfaces, fiat on-ramps, and easy onboarding processes,” he
added.
Sponsored
Sponsored
By creating supportive educational resources and adoption-friendly
initiatives, DEXs can facilitate adaptability for users interested in
switching to decentralized exchanges.
Bridging Centralized and Decentralized Options
Kevin Lee of Gate.io says CEXs can leverage this advantage to fend off
competition from increasingly popular DEXs like Hyperliquid, Uniswap, and
PancakeSwap.
“CEXs can lead in user education and onboarding by
simplifying access to blockchain• Информационные технологии » Информационно-коммуникационные технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн
• Высокие технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн technologies and creating
intuitive user experiences. Collaborations with emerging projects
and ecosystems help expand the scope of innovation on
their platforms,” Lee explained.
Centralized exchanges should also integrate solutions that cater to the needs
of investors who prioritize decentralized approaches to trading.
“By integrating hybrid models, such as non-custodial wallets
and decentralized trading options, CEXs can provide users
with a bridge between centralized convenience and
decentralized autonomy. Moreover, offering value-added services
like fiat on-ramps, advanced trading tools, staking, and
institutional-grade products allows CEXs to cater to a wider range of users,”
Lee explained.
As both CEXs and DEXs gain popularity, they are likely to learn from each
other to overcome their respective challenges. Addressing these gaps will
ensure cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта exchanges sustainable growth and long-term
success.
Disclaimer
Following the Trust Project guidelines, this feature article presents opinions
and perspectives from industry experts or individuals. BeInCrypto is dedicated
to transparent reporting, but the views expressed in this article do not
necessarily reflect those of BeInCrypto or its staff. Readers should verify
information independently and consult with a professional before making
decisions based on this content. Please note that our Terms and Conditions ,
Privacy Policy , and Disclaimers have been updated.
