User interactions on DEXs have continually increased, with traditional centralized exchanges falling behind. Cryptocurrency exchanges must reach a mass audience or a small audience of large-scale traders to continue trading.
Amid numerous user interactions, cryptocurrency market platforms have been gaining volume and influence. Although decentralized exchanges have grown faster than centralized ones, the latter still retain their relevance.
Unlike centralized exchanges, decentralized exchanges fulfill functions that go beyond the control of a central authority. That means that the nodes (or computers) and the developers distributed in different places make the decisions together.
Cryptocurrency Exchanges Have Grown Quickly
Data from Chainalysis reveals that the evolution of cryptocurrency-related platforms has been exceptional in the last two years. The participants in both large purchases and retail investments have influenced the observed growth.
The events earlier this year suggest that cryptocurrency exchanges have gained relevance by up to more than 100% in some particular cases. That happened with decentralized exchanges (DEX), which have achieved an average growth of over 200%.
User interactions increased somewhat continuously to the point where traditional centralized exchanges (CEX) fell behind. From that perspective, the rise registered by those platforms reached 120%, while they could not maintain the percentage, which returned to 100%.
CEXs Maintain Their Space Despite the Superiority of DEXs
The growth of DEXs exponentially outpaced that of centralized exchanges, which have not disappeared. On the contrary, they retain an influence on the operations of the markets and have grown recently.
The popularity of DeFi technologies has overshadowed the strengthening pace of CEXs, in terms of their role as exchange platforms. However, that situation does not imply any significant pullback among centralized exchanges, which have gained more attention.
The Largest Cryptocurrency Exchanges Achieve Greater Reach
The comparison between DEX and CEX seeks to determine which of them will dominate the markets. The hasty expansion of both types of platforms is a pattern that has repeated itself in recent months. When new decentralized or centralized exchanges with greater reach have emerged, the smallest ones have remained outside.
According to data from Chainalysis, cryptocurrency exchanges must reach a mass audience or a small audience of large-scale traders. That would help those platforms to continue operating in the long term.
Decentralization Offers More Advantages to Cryptocurrency Investors
Decentralization in the field of cryptocurrencies means there is greater confidence in trading those assets. People seek to decentralize processes to make them more efficient and transparent than if a single entity controlled them.
The situation is the same when it comes to decentralized cryptocurrency exchanges, as transactions occur efficiently. However, although blockchain technology allows the high decentralization of the financial system, it has not yet had its counterpart in those platforms.
Exchanges are essential to the world of cryptocurrencies since all the factors in the community can communicate through them. Traders can conduct their transactions freely, allowing the value of crypto assets to fluctuate thanks to supply and demand.
By Alexander Salazar
