DEX hasn't died; CEX just caught the wind
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DEX hasn't died; CEX just caught the wind
The growth of DEXs in spot, derivatives, and perpetual contracts indicates they offer functionalities that CEXs cannot replicate—at least not yet.
Navigating Web3 tides with focused insightsAuthor: Prathik Desai
Translation: Block unicorn
For both centralized exchanges (CEX) and decentralized exchanges (DEX), the past year has been one of significant change. Over the last 12 to 18 months, participants in the cryptocurrency space have witnessed a shift in trading momentum and liquidity from centralized exchanges (CEX)—which rely on trust and compliance—toward decentralized exchanges (DEX) that promise users transparency, composability, and self-custody.
Although media reports claim a strong comeback for centralized exchanges, a deeper analysis of the data reveals a far more complex reality.
In this quantitative analysis, I will delve into DEX and CEX data to gain a better understanding of the evolution of spot and leveraged liquidity in cryptocurrency trading.
The CEX-DEX Battle
In the long run, 2025 appears to be the year when centralized exchanges (CEX) made a strong recovery after nearly two years of declining confidence and shrinking liquidity. From January 2021 to May 2022, the average monthly trading volume of centralized exchanges far exceeded $1.5 trillion. However, from June 2022 to November 2023, monthly trading volume surpassed the $1 trillion mark only once.
Over the past two years, CEX trading volumes surged. Fueled by favorable factors such as ETF approvals and macroeconomic conditions, trading volumes reached new highs. By December 2024, this figure had climbed to $2.94 trillion.
The fourth quarter of 2024 marked a turning point in volume growth. CEX spot trading volume skyrocketed from $1.14 trillion in October to $2.94 trillion in December, pushing the quarterly average monthly volume above $2.25 trillion.
This growth coincided with increased market risk appetite following U.S. President Donald Trump’s re-election and progress in negotiations supporting cryptocurrency regulation.
The first quarter of 2025 continued this upward trend, with average monthly volumes approaching $1.8 trillion, though they declined by about 30% in the second quarter to $1.3 trillion. However, in the third quarter of 2025, volumes rebounded rapidly, exceeding $1.8 trillion in average monthly volume.
While centralized exchanges (CEX) were making a strong comeback, decentralized exchanges (DEX) did not stand still. In fact, their growth consistently outpaced that of centralized exchanges.
In January 2024, DEX spot trading volume was approximately $133 billion. Just 18 months later, this number quadrupled, surpassing $540 billion.
In the first quarter of 2025, DEX average monthly volume was $395 billion, followed by $332 billion in the second quarter. By the third quarter of 2025, monthly volume had grown by 50%, reaching $480 billion. Trading volume in October alone exceeded $540 billion.
Year-to-date, decentralized exchanges (DEX) have accounted for nearly 20% of all spot trading volume, up from just over 10% in 2024. While centralized exchanges (CEX) still dominate the market due to advantages in fiat on-ramps, DEXs have become the preferred choice for users seeking speed, composability, anonymity, and self-custody.
Improved user experiences, lower gas fees, and tighter spreads offered by protocols such as Uniswap v4, Hyperliquid L1, and Raydium have narrowed the experience gap between the two ecosystems.
The Power of Derivatives
If asked what the most important factor driving DEX activity is, I would毫不犹豫ly choose perpetual contracts. Prior to 2024, on-chain perpetual contracts remained a niche product, with monthly trading volumes in the tens of billions of dollars. This was primarily concentrated on protocols such as dYdX, GMX, and other Arbitrum-based DEXs. However, by the end of 2025, these platforms began to rival the entire decentralized exchange (DEX) spot market in scale.
In January 2024, the monthly trading volume of perpetual contract DEXs was $127 billion. By December 2024, this number nearly tripled to $345 billion.
But 2025 changed the trajectory. Monthly average trading volume for perpetual contracts grew from $332 billion in the first quarter to $688 billion in the third quarter—a more than doubling. In October alone, trading volume exceeded $1.13 trillion, marking the first time on-chain derivatives volume surpassed $1 trillion in a single month, more than double the size of the DEX spot market.
These figures indicate not only an influx of more traders into on-chain markets but also increased trading activity per trader. On-chain DEXs offering perpetual contracts now replicate some features of centralized exchanges (CEX), such as isolated margin, deep order books, and cross-chain collateral. Additionally, they offer high levels of composability unavailable on CEXs. These advantages are sufficient to retain many high-value traders on-chain.
This trend is reflected in the steadily rising ratio of DEX to CEX trading volume in derivatives.
In 2024, decentralized exchanges handled less than 5% of global futures trading volume. By mid-2025, this doubled to 10%, and by October, it reached 14.3%, setting a record high for on-chain derivatives relative to centralized exchanges.
Compared to Binance's scale, this number remains small, but it signals the direction of future development. While CEX derivatives trading volume has largely fluctuated within a range this year, DEX trading volume has grown quarter after quarter since mid-2023.
Trading volume tells part of the story, but open interest (OI) provides a more nuanced picture. As of January 1, 2024, open interest on on-chain exchanges accounted for only 1.5% of global derivatives volume. By December 31, 2024, this had doubled to 3.7%, reaching 5.9% by June 30, 2025, and hitting 9.8% by September 30, 2025. In less than two years, it grew more than 6.5 times.
Together, these changes indicate that while centralized exchanges (CEX) remain the center of liquidity, decentralized exchanges (DEX) are quickly becoming the new hub of risk. Where traders choose to trade depends not only on trust but also on the added functionalities provided by the platform.
The growth of DEXs in spot, derivatives, and perpetual contracts shows they offer features that CEXs cannot replicate—at least not yet. The absolute number of on-chain traders may still be small, but their intentions and demanded features send a clear message to cryptocurrency developers: these are the aspects that should be prioritized when building crypto exchanges.
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