When trading meme coins, timing is crucial as waiting on a centralized exchange (CEX) can lead to missed opportunities. For instance, on January 17, 2025, Donald Trump’s memecoin launched on Solana, with its decentralized exchanges (DEXs) allowing it to surpass a $14.5 billion peak market cap in under 24 hours, making it momentarily the second-largest memecoin after Dogecoin.
By the time CEXs listed the coin after the usual delays, the main action had concluded. Thus, for speculators, DEXs present advantages in speed, liquidity, volatility, and enjoyment. In a market where fortunes can change in mere moments, waiting for a CEX can mean losing a chance for profit.
On the Monday following the frenzy surrounding $TRUMP, I had a discussion with Bobby Ong, co-founder of CoinGecko, a prominent source for crypto data which has gained over 40 million monthly visitors. Founded in 2014, CoinGecko was created to fulfill the need for better crypto price tracking tools. Bobby has been an influential figure in the crypto landscape since he purchased Bitcoin for the first time in 2013.
Despite our initial plan to converse about crypto adoption trends at the upcoming Consensus Hong Kong, our dialogue pivoted towards the shortcomings of centralized exchanges in the context of recent market events.
The Attraction of DEXs
For CEX users, waking up post-memecoin surge was stark: they had lost out on nearly 41,000% returns. This was particularly disheartening since the asset was linked to the recapitalized U.S. president, illustrating CEXs’ slow response times.
In mere 72 hours, DEX users on Solana experienced unprecedented activity, recording $28 billion in trades primarily due to $TRUMP and the subsequent $MELANIA token. Such engagement level in DeFi was unimaginable until recently.
Bobby remarked, “The experience with decentralized exchanges is superior compared to centralized exchanges, and people gravitate to that — that’s what I’m seeing in the market right now.”
New Realities in Crypto Trading
Reflecting on past trends, CoinGecko’s 2020 report showed that combined trading volumes of CEXs and DEXs surged to $534 billion, with CEXs accounting for 93% of this growth. Fast forward to 2024, the leading ten DEXs alone achieved trading volumes close to $1.76 trillion. Notably, Solana outshone Ethereum by achieving over $219.2 billion in DEX trade volume.
Ong explained the evolution of mobile applications in crypto trading, emphasizing improved user experiences that parallel DEXs with CEXs in terms of accessibility. He observed that traditional barriers to onboarding users have diminished significantly.
As Ong specified, the trend of CEXs facing existential threats from DEXs points to a future where decentralized systems continue to grow at an unprecedented pace. Regulatory challenges faced by CEXs juxtapose them against the providerless aspect of DEXs, highlighting an evolutionary shift in the trading environment.
The Future of Crypto Exchanges
Southeast Asia, loaded with tech-savvy individuals yet lacking high-yielding investment alternatives, finds itself in limelight where lucrative returns via crypto align with existing economic gaps. Users, mostly driven by immediate financial needs, engage with crypto transactions but predominantly seek high yields.
Both DEXs and CEXs are now contending for a user base in crucial markets like India, Indonesia, and the Philippines. Ironically, these recently emerging networks face fewer regulatory hurdles compared to traditional financial systems, fostering an environment where decentralized exchanges can thrive.
Conclusion
Amidst the ongoing ascent of DEXs, the trajectory suggests potential transformation in how individuals approach finance and investments. Given the current advantages of decentralized systems, the only certainty is the continuous evolution of the crypto landscape.
