The Block
Data shows that the ratio of trading volume between decentralized exchanges (DEX) and centralized exchanges (CEX) is reaching a historical high. The DeFi ecosystem is developing at an unprecedented speed, and the Solana Foundation acknowledges this, stating that choosing the right blockchain will be one of the important keys for developers.
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DEX Market Share Reaches New High, Raydium Stands Out
Solana Foundation: DeFi is Expanding Rapidly
Current Challenges and Diversification in DeFi
The ratio of trading volume between DEX and CEX has reached its highest point in a year, indicating that DEX is gradually gaining significant market share in the cryptocurrency market.
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The above chart shows that the DEX market share compared to CEX has reached 13.76%, surpassing the previous high of 13% before May last year.
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This change occurred while DEX monthly trading volume has been declining for four consecutive months, with Raydium showing the most remarkable performance among DEXs. Its market share has grown from 7.93% since the beginning of the year to 21%, taking a part of the market dominance from Uniswap.
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On the CEX side, 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 the Biggest Winner After FTX Collapse?)
In response to this, the Solana Foundation also made similar findings in its recent report, stating that despite the challenges faced by DeFi, including financial instability and regulatory pressures, it continues to create new markets and penetrate the existing cryptocurrency market at an unprecedented speed.
Having evolved from lending and yield farming to tokenization and staking, the Solana Foundation attributes the explosive development of the DeFi ecosystem to the introduction of various stablecoins, which it considers as one of the major “killer applications”.
However, it also acknowledges that as DeFi expands, the obstacles faced by project parties and developers become more apparent. These obstacles primarily include:
– Unclear regulatory environment (led by US authorities’ hostile attitude)
– Unstable market demand (highly volatile market sentiment)
– Difficulties in sustaining user incentives
– Information security risks
At the same time, the Solana Foundation emphasizes that due to technical differences between blockchains, the situation of application uniqueness and user competition intensifies:
In contrast, blockchains with a large existing user base and the lowest associated costs will attract developers with different perspectives.
However, the Solana Foundation still expresses affirmation towards the recent development of DeFi, stating that diversification and the development of super applications are accelerating the variability of the DeFi ecosystem.
It highlights obvious cases such as Solana Actions and Blinks, which simplify user experience, as well as TON, which integrates the advantages of social media.
(EthCC | The Narrative of Payments Returns! Solana Foundation Chairman: PayFi Will Rewrite the Finance 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 further adds, “As the current challenges become more severe, competition among developers will intensify, making the choice of blockchain particularly important.”
CEX
DeFi
DEX
Solana
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Further reading:
Exchange S2 Market Report: Crypto.com Shines, Bybit the Biggest Winner After FTX Collapse?
Bitfinex Halts Trading without Prior Notice, Team: Due to Abnormal Performance Maintenance.