Chainalysis: DEX is crowding out centralized exchanges in the crypto market – Bits Media

Analysts from the consulting agency Chainalysis note, that the growth of large decentralized financial systems in 2021 served as a catalyst for the popularization of DEX among cryptocurrency investors.

Chainalysis posted a report, Which is said, what decentralized exchanges (DEX) surpassed centralized (OC) over the past year in terms of volume of intranet transactions. According to agency research, from April 2021 year to April 2022 year, cryptocurrencies were sent to CEX blockchains for $175 billion. It's noticeably smaller $224 billion, moved to DEX over the same period of time.

The Rise of Decentralized Financial Systems (DeFi) peaked in June 2021 of the year. Decentralized platforms accounted for more than 75% total transaction volume.

The report's authors believe, that since DeFi activity has waned, and the market trend remained “relatively bearish”, two types of exchanges have almost split the current market share: 55% accounts for DEX and 45% on CEX.

“CEX transaction volume reached record levels at the end of 2017 of the year, when Bitcoin hit a new all-time high. Following the increase in cryptocurrency prices in 2021 year, transaction volumes in DEX and CEX increased sharply", - analysts note.

From April to April, on-chain transactions were more focused on the five largest DEXs, and not on the top five CEXs. The authors of the report specify, what 85% transaction volumes accounted for DEX Uniswap, Sushiswap, Curve, dYdX and protocol 0x. At the same time on Binance.com, OKX.com, Coinbase.com, Gemini.com and FTX.com were held 50% total volume of CEX transactions.

The large volume of transactions on DEX is due to high liquidity, providing stable pricing even for the largest market participants. The report's authors believe, what, if DEXs keep transaction fees low and prices affordable, they will be able to supplant CEX over time. At the same time, DEXs must find a way to convince key investors “in favor of further automation, disintermediation and self-service. Analysts emphasize, that regulatory oversight could become a major issue for DEXs in the foreseeable future.

In January, cybersecurity agency Certik, studying hacker attacks on DeFi protocols for 2021 year, discovered, that 16.5% of cases are associated with elements of centralization.