An article on Crypto.IQ from a few weeks ago discussed how the trading volume of Decentralized Exchanges (DEXs) was rising significantly, and accounted for 5% of global crypto trading volume in August. This was a drastic increase from previous months and years, when DEX volume was essentially negligible.
Now DEXs have achieved another milestone, with the trading volume of Uniswap exceeding Coinbase in September. Specifically, Coinbase had $13.6 billion of trading volume in September, while Uniswap had $15.4 billion of volume.
In other words, Uniswap, which is a DEX, has beat out the volume of Coinbase, which is the most popular retail crypto exchange in the United States. This is perhaps the most powerful stat yet which shows that DEXs are becoming a serious force in the crypto space.
Further, the DEX to centralized exchange (CEX) trading volume ratio rose to 13.9% in September from 6% in August, indicating that the volume of DEXs relative to centralized exchanges is rapidly rising.
Zooming out, now that DEXs are gaining significant trading volume and liquidity, it is likely that this trend will only continue to intensify since DEXs have many advantages over centralized exchanges.
Basically, centralized exchanges are bogged down by regulatory issues, which leads to less crypto listings, account seizures, and accounts being limited in general. Also, centralized exchanges are highly prone to getting hacked.
On the other hand, DEXs have none of these problems, and are highly secure since trades are peer to peer and no funds are held on the exchange itself, all cryptos are listed, and accounts aren’t ever limited or seized.
In fact, the only disadvantage of DEXs up to now was that they lacked liquidity and trading volume, but now that DEXs are gaining significant liquidity and trading volume, DEXs are becoming more attractive than centralized exchanges due to all of the other benefits of DEXs.
DEXs are rapidly gaining on centralized exchanges as illustrated by the volume of Uniswap overtaking Coinbase, and it seems possible that in the coming year DEXs will overtake the trading volume of centralized exchanges, since DEXs have critical advantages over centralized exchanges.