Increase in Market Share of DEX Compared to CEX Solana Foundation Unprecedented Speed of DeFi Development

Data indicates that the ratio of decentralized exchanges (DEX) to centralized exchanges (CEX) spot trading volume is reaching a historic high. The DeFi ecosystem is developing at an unprecedented speed, and the Solana Foundation recognizes this, stating that choosing the right blockchain will be crucial for developers.

Table of Contents:
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DEX Market Share Reaches New High, Raydium Stands Out
Solana Foundation: DeFi is Rapidly Expanding
Current Challenges and Issues in DeFi
Diversification is Fueling DeFi Variability

The ratio of DEX spot trading volume to CEX spot trading volume has reached its highest point in a year, indicating that DEXs are gradually gaining significant market share in the cryptocurrency market.

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The chart above shows that the DEX market share compared to CEX has reached 13.76%, surpassing the previous high of 13% in May last year.

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This change occurred while DEX spot trading volume has been declining for four consecutive months. Among DEXs, Raydium has stood out with its market share growing from 7.93% to 21% since the beginning of the year, capturing a significant portion of Uniswap’s dominant position in the market.

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On the other hand, in the CEX space, Crypto.com and Bybit have emerged as leaders, competing fiercely in the North American market and global offshore exchanges.

(Exchange S2 Market Report: Crypto.com Shines, Bybit Emerges as the Biggest Winner after FTX Collapse?)

The Solana Foundation also made similar findings in its recent report, stating that despite facing challenges such as financial instability and regulatory pressures, DeFi is creating new markets and penetrating existing crypto markets at an unprecedented speed.

From lending and yield farming to tokenization and staking, the Solana Foundation attributes the explosive growth of the DeFi ecosystem to the introduction of various stablecoins, which it considers as one of the main “killer applications.”

However, it also acknowledges that as DeFi expands, the obstacles faced by projects and developers are gradually becoming apparent, including:

Unclear regulatory environment (led by US authorities’ hostile attitude)
Unstable market demand (highly volatile market sentiment)
Difficulties in sustaining user incentive measures
Information security risks

At the same time, the Solana Foundation emphasizes that the technical differences between blockchains have led to the uniqueness of applications and intensified competition among users:

In response, blockchains with a large existing user base and the lowest associated costs will attract a completely different set of developers.

However, the Solana Foundation remains positive about the recent development of DeFi, stating that diversification and the development of super applications are accelerating the variability of the DeFi ecosystem.

It highlights Solana Actions and Blinks, which simplify user experience, and TON, which integrates the advantages of social media, as evident examples.

(EthCC|Payment Narrative Returns! Solana Foundation Chairman: PayFi Will Rewrite the Financial Industry with “Buy Now, Pay Later”)

Finally, the Solana Foundation compares the recent development of DeFi to being “fast and dramatic,” stating that it is creating new markets and penetrating existing ones:

The trend indicates that expanding integration with existing Web2 infrastructure, continuously improving intuitive user experience, promoting community interaction, and devising methods to enhance user loyalty are all factors that can effectively contribute to the success of DeFi projects.

It adds, “As challenges intensify, the competition among developers will also increase, making the choice of blockchain particularly important.”

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DeFi
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Further reading:
Exchange S2 Market Report: Crypto.com Shines, Bybit Emerges as the Biggest Winner after FTX Collapse?
Bitfinex Unexpectedly Suspends Trading, Team: Due to Abnormal Performance Maintenance