DEX share in futures trading to further decline compared to CEX

This is a recent report from Data and Insights from The Block that takes stock of the tough competition between centralized exchanges and decentralized exchanges on the important cryptocurrency futures market.

According to the proportion of futures trading volumes between CEX and DEX, the share of the latter now represented only 3.26% of the total at the end of September 2024. This ratio had nevertheless reached a high point that same year, with a share of 5.18% for DEX in February 2024.

Binance dominates Bitcoin futures market by a wide margin

The report notes the honorable performance of certain decentralized platforms, such as the DEX Hyperliquid which can handle up to $3 billion in volumes daily.

But that's still incomparable with a CEX like Binance, which generated $480 billion in trading volumes on Bitcoin futures alone in September (an average of $16 billion per day, just for BTC futures contracts).

In the report, the lack of liquidity and generally poorer user experience of DEXs are cited as reasons for the preference for centralized platforms. Interaction with smart contracts and gas fee management can also “be daunting,” especially for newcomers to the crypto space.

While the fight between CEXs and DEXs is likely to be tough for the latter, they can still count on a significant incentive. Where centralized platforms cannot (regulatory) afford to issue and offer tokens, decentralized protocols can offer airdrops to their users. This is the case, for example, of Hyperliquid, which announced the airdrop of its HYPE token to thank its community.