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Author: Prathik Desai
Compiled by: Block unicorn
Preface
For centralized exchanges (CEX) and decentralized exchanges (DEX), the past year has been full of changes. In the past 12 to 18 months, participants in the cryptocurrency space have witnessed a shift in trading momentum and liquidity from centralized exchanges (CEX) that rely on trust and compliance to decentralized exchanges (DEX) that promise users transparency, composability, and self-custody.
Although media reports claim that centralized trading is making a strong comeback, a deeper analysis of the data reveals that the actual situation is much more complicated.
In this quantitative analysis, I will delve into the data of DEX and CEX to better understand the evolution of spot and leverage liquidity in cryptocurrency trading.
The Battle of CEX and DEX
In the long run, 2025 seems to be a year of strong recovery for centralized exchanges (CEX) after nearly two years of declining confidence and shrinking liquidity. From January 2021 to May 2022, the average monthly trading volume of centralized exchanges far exceeded $1.5 trillion. However, since June 2022, until November 2023, the monthly trading volume has only surpassed the $1 trillion mark once.
In the past two years, trading volume on CEX has surged. Benefiting from the positive factors of ETFs and the macro economy, trading volume has repeatedly reached new highs. By December 2024, this figure had risen to $2.94 trillion.
The fourth quarter of 2024 is a turning point for trading volume growth. The spot trading volume of CEX soared from $1.14 trillion in October to $2.94 trillion in December, resulting in a monthly average trading volume exceeding $2.25 trillion for the quarter.
This growth coincides with the rising market risk appetite sentiment following the reelection of U.S. President Donald Trump and the progress of negotiations supporting cryptocurrency regulation.
The first quarter of 2025 continued this growth momentum, with a monthly average trading volume close to $1.8 trillion, but it dropped by about 30% in the second quarter to $1.3 trillion. However, in the third quarter of 2025, trading volume quickly rebounded, with a monthly average trading volume exceeding $1.8 trillion.
While centralized exchanges (CEX) are experiencing a strong recovery, decentralized exchanges (DEX) have not been stagnant. In fact, their growth rate continues to outpace that of centralized exchanges.
In January 2024, the spot trading volume of DEX was approximately 133 billion USD. Just 18 months later, this figure quadrupled to over 540 billion USD.
In the first quarter of 2025, the average monthly trading volume of DEX was $395 billion, and in the second quarter, it was $332 billion. By the third quarter of 2025, the average monthly trading volume increased by 50%, reaching $480 billion. The trading volume in October has exceeded $540 billion.
So far this year, the spot trading volume of the decentralized exchange (DEX) has accounted for nearly 20% of the total spot trading volume, slightly higher than the 10% in 2024. Although centralized exchanges (CEX) still dominate the market due to the advantages of fiat recharge channels, DEX has become the preferred choice for users seeking speed, composability, anonymity, and self-custody.
Protocols such as Uniswap v4, Hyperliquid L1, and Raydium offer a better user experience, lower Gas fees, and smaller spreads, narrowing the experiential gap between the two ecosystems.
The driving force of derivatives
If you ask me what the most important factor driving DEX activity is, I would not hesitate to choose perpetual contracts. Before 2024, on-chain perpetual contracts were still a niche product, with monthly trading volumes only in the tens of billions of dollars. This was mainly concentrated on protocols like dYdX, GMX, and a few other Arbitrum-based DEXs. However, by the end of 2025, the scale of these platforms began to rival the entire decentralized exchange (DEX) spot market.
In January 2024, the monthly trading volume of perpetual contract DEX was 127 billion USD. By December 2024, this figure nearly tripled to 345 billion USD.
However, 2025 changed this trend. The average monthly trading volume of perpetual contracts grew from $332 billion in the first quarter to $688 billion in the third quarter, more than doubling. In October alone, its trading volume exceeded $1.13 trillion, marking the first month in which on-chain derivatives trading volume surpassed $1 trillion, more than twice the size of the DEX spot market.
These data not only indicate that more traders are entering the on-chain space, but also show that the trading activity of each trader has increased. On-chain DEXs offering perpetual contracts have now replicated some features of centralized exchanges (CEXs), such as isolated margin, deep order books, and cross-chain collateral. Furthermore, they also provide a high level of composability that CEXs cannot offer. These advantages are sufficient to retain many high-value traders to trade on-chain.
This trend is reflected in the stable rise of the trading ratio between decentralized exchanges (DEX) and centralized exchanges (CEX) in derivatives trading.
In 2024, the global futures trading volume handled by decentralized exchanges accounted for less than 5%. By mid-2025, this figure doubled to 10%, and by October, it reached 14.3%, marking the highest proportion of on-chain derivatives relative to centralized exchanges.
Compared to Binance's scale, this number is still small, but it foreshadows the future development direction. Although the trading volume of centralized exchange derivatives has basically remained within a range this year, the trading volume of decentralized exchanges has been growing every quarter since the middle of 2023.
While trading volume can reflect part of the situation, the open interest (OI) provides more detailed information. As of January 1, 2024, open interest on on-chain exchanges only accounted for 1.5% of the global derivatives trading volume. By December 31, 2024, this proportion doubled to 3.7%, reaching 5.9% by June 30, 2025. By September 30, 2025, this proportion reached 9.8%. In less than two years, it has grown by more than 6.5 times.
These changes collectively indicate that although centralized exchanges (CEX) remain the liquidity centers, decentralized exchanges (DEX) will soon become the new risk centers. Traders' choices of where to trade depend not only on trust but also on the additional features of the platform.
The growth of DEX in the spot, derivatives, and perpetual contract sectors indicates that they offer functionalities that CEX cannot replicate, at least not at the moment. The absolute number of on-chain traders may still be a minority, but their intentions and the functionalities they demand send a clear message to cryptocurrency developers: which aspects should be prioritized when developing cryptocurrency exchanges.
That's all for this quantitative analysis report. See you in the next article.
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