DeFi vs. CEX? CZ Says the Winner Is Clear – and It’s Not Centralization

On the current BNBDay occasion in Tokyo, Binance founder Changpeng “CZ” Zhao mentioned decentralized exchanges (DEXs) will finally surpass their centralized counterparts (CEXs) in buying and selling quantity.

CZ famous that whereas CEXs at the moment dominate the market because of their liquidity and user-friendly expertise, the momentum is shifting towards decentralized finance (DeFi). He additionally added {that a} really non-public, environment friendly, and user-centric DEX would have the potential to reshape the business.

The DEX Attraction

The previous govt expressed that if he had been 20 years youthful, he would deal with constructing each an AI-powered buying and selling agent and a privacy-preserving perpetual DEX, as he sees the most important alternatives for innovation.

Whereas acknowledging regulatory and liquidity hurdles, notably in areas like real-world property (RWA), CZ maintained that the DeFi ecosystem represents the way forward for finance.

Within the second quarter of 2025, DEXs achieved their highest-ever market share in spot buying and selling volumes, in response to a report shared by CoinGecko. Whereas CEXs stay dominant, the report highlighted clear indicators of weakening momentum. Binance, the biggest CEX by market share, nonetheless led the sector however noticed its quarterly spot buying and selling quantity decline sharply to $1.47 trillion, down from over $2 trillion beforehand.

Different main CEXs fared even worse. As an illustration, Crypto.com endured a whopping 61% drop, and Coinbase additionally skilled decrease volumes, in a wider slowdown throughout centralized platforms amid rising dealer migration to decentralized venues.

The surge in DEX exercise was pushed largely by PancakeSwap, which emerged because the standout performer of the quarter. The platform’s buying and selling quantity grew greater than fivefold in comparison with Q1, which catapulted it to the highest of the decentralized change rankings. This development indicators rising dealer choice for non-custodial platforms that prioritize privateness, management, and suppleness over centralized infrastructure.

Emergence of Hybrid CeDeFi

A key issue behind the surge in DEX exercise is the rise of hybrid CeDeFi platforms, which mix the strengths of centralized and decentralized fashions. As just lately reported by Binance Analysis, main exchanges are more and more channeling liquidity towards these methods, which supply customers low-slippage trades, MEV safety, and sooner execution whereas retaining the transparency of on-chain settlement.

Binance Analysis famous that such improvements are making DEXs extra scalable and aggressive, successfully narrowing the hole with conventional CEXs. In the meantime, DeFi’s versatile regulatory atmosphere has enabled fast experimentation and have rollouts, which have fueled regular development in on-chain volumes.

The identical can’t be mentioned for CEXs whose spot buying and selling stays closely influenced by retail sentiment, macroeconomic headwinds, and volatility.

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