Why are DEXs gaining more popularity?

Be the First to Comment Read

Why are DEXs gaining more popularity?

Follow us on Google News:
 Why are DEXs gaining more popularity?
Image source: © Srr283 | Megapixl.com

Highlights

  • According to research from a Citi report, DEXs have grown faster than CEXs over the past two years.
  • Citi highlights that the gap will likely widen, considering users prefer to avoid their more onerous KYC procedures.

The year 2022 has been a tutumulous year for cryptocurrencies. Not only has the market witnessed bearishness, but even there has been an increase in the number of tokens collapsing. Amid this, the decentralised exchanges, which are trustless in nature, have climbed up the charts compared to their counterparts.

According to a research firm Chainalysis, the decentralised exchanges received about US$224 billion in value from April 2021 to April 2022. Compared to the DEXs, the centralised exchanges only contributed US$175 billion in the same period.

According to the Chainalysis report, the top five decentralised services, such as Uniswap, ShushiSwap etc., account for 85% of all aggregated DEX transaction volume

Why are DEXs getting popular

But with the talks of crypto regulations taking rounds, we may see an increase in more number of people moving towards DEXs.

According to research from a Citi report, DEXs have grown faster than CEXs over the past two years. The gap will likely widen, considering users prefer to avoid their more onerous KYC procedures. Citi feels one reason for the users to switch to DEXs may be the custody of funds, as users often find CEXs risky in storing assets with CEXs.

Conclusion

While the DEXs growth indicates that there is room for such peer-to-peer marketplaces, allowing users to make transactions directly without third-party invovlement. While they have grown late, they can be equally risky as CEXs. Therefore, as an investor, it would be advisabel to do proper market research before the crypto domain and understand the nuances of the market and its working before making big investment decisions.

Risk Disclosure: Trading in cryptocurrencies involves high risks, including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instruments or cryptocurrencies, you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete, or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.

Disclaimer

Featured Articles