Despite the resounding collapse of crypto exchange FTX, centralized exchanges (CEX) remain key to attracting the general public to the industry. These platforms are often the first point of contact for newcomers to the world of cryptocurrencies! Therefore, it is likely that the next 100 millions of adopters their entry into the industry via CEXs.
CEXs: Gateway to the mass adoption of crypto!
According to Ruslan Fakhrutdinov, founder of the X10 trading platform, CEXs will continue to lead the way for the time being. It is much easier to move a user from a centralized exchange to a hybrid exchange! Than introducing a new user to the space. Trust in the underlying business and a more intuitive trading experience are the main reasons new crypto investors choose CEXs.
To attract more traditional retail investors, hybrid and decentralized exchanges need to improve user experience! But also, renew their marketing efforts. Hybrid exchanges, which combine the workflow and trading experience of CEXs with the non-custodial elements of DEXs, could restore confidence after the collapse of FTX.
CEX VS DEX: Who will control the ecosystem in the future?
CEXs, which go against the decentralization ethos of Bitcoin (BTC), are controlled by a central party. Which inevitably creates third-party vulnerabilities. Despite the emergence of alternatives like DEXs and hybrid exchanges, CEXs control the majority of trading volume crypto. For example, the cumulative trading volume on DEXs reached a total of $3.56 billion over the past 24 hours. Which is four times lower than the $15.1 billion trading volume amassed by Binance, the world's largest CEX.
Finally, although hybrid exchanges are emerging as a middle ground between CEXs and DEXs, centralized exchanges remain a key element for mass adoption of crypto. They provide an accessible entry point for new users and will continue to play a leading role in introducing cryptos to the general public. The future could see a coexistence of CEX, DEX and hybrid exchanges. Each playing a unique role in the overall cryptocurrency ecosystem.
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