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Centralized cryptocurrency exchanges (CEX) operators say they are unfazed by the increasing trading volumes on decentralized exchanges (DEX) because the latter\u2019s liquidity is still too insignificant to cause user mass migration. The majority of CEX operators also insist that it is very unlikely the DEXs\u2019 liquidity would surpass their own liquidity in 2 years\u2019 time. <\/strong><\/p>\n The comments by operators of CEX platforms come at the time when traded volumes on DEX applications are increasing courtesy of the rapidly growing Defi ecosystem. Underlining this growth is Uniswap\u2019s monthly trade volume which exceeded that of Coinbase in September.<\/p>\n As data from the survey<\/a> conducted by cryptocompare.com shows, CEX operators are conceding that volumes on DEXs are growing, but they suggest different reasons why this is happening. To begin with, the survey data shows that about 46.2% or 12 out of 26 of the responding operators \u201cbelieve that the anonymity afforded by DEXs was the primary reason users traded on DEXs.\u201d About 19.2% (5) believe the self-custody feature is the secondary driver of volumes on DEXs.<\/p>\n However, on the flip side, the respondents thought that \u201cliquidity and fiat compatibility were the two main reasons why users preferred CEXs over DEXs.\u201d<\/p>\n When asked about the possibility of DEXs usurping CEXs in the liquidity stakes, over 70% thought this will not happen anytime soon. The survey says:<\/p>\n Exchange operators felt their deeper liquidity would be an unassailable competitive advantage in the next 2 years. Over 70% of respondents thought it was unlikely or very unlikely DEX liquidity would surpass CEX liquidity in 2 years\u2019 time.<\/p>\n<\/blockquote>\n Interestingly, the survey data shows that 40% of the respondents say \u201cthey are actively building or may build a DEX in the near future.\u201d<\/p>\n With respect to the issue of user experience (UX), the respondents were less emphatic about the prospects of CEXs on this. According to the findings, just \u201c57% of respondents believe it was unlikely or very unlikely that DEXs will have better UX in 2 years.\u201d Only 11% of respondents thought that DEXs will have better UX than CEXs in 2 years\u2019 time.<\/p>\n Meanwhile, the survey notes that as more digital asset exchanges are launched, \u201cquestions are being raised around the legitimacy of the volumes garnered by these upstarts.\u201d Some analysts predict that there will be a decline of exchanges either through mergers and acquisitions or competition driving out weaker exchanges.<\/p>\n On this subject, cryptocompare.com shows that opinion is almost evenly divided as 42.3% of respondents expect to see an increase in this number next 2 years while 46.2% are expecting to see the number decline. On the question of fees, \u201cthere was more alignment with 65% of exchanges expecting to see trading fees decrease and only 11.5% expecting fees to increase.\u201d<\/p>\n On the question of institutional investors entering the sector in the next two years, there was near unanimity as 92% of exchanges were optimistic that there will be a rise in What do you think will be the outcome of the rivalry between DEXs and CEXs in a year\u2019s time? Share your thoughts in the comments section below.<\/strong><\/em><\/p>\n The post Centralized Exchange Operators Believe Low Liquidity on DEX Platforms Stops User Migration<\/a> appeared first on Bitcoin News<\/a>.<\/p>\nCEXs Rule Liquidity and Fiat Compatibility<\/h2>\n
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<\/a>Meanwhile, four CEXs or 15% of respondents say yield farming is another driving factor while just two exchange operators believe the lack of a third party operator to be the reason users are flocking to DEXs.<\/p>\n\n
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<\/a><\/p>\nOperators Expect Fees to Fall<\/h2>\n
\ninstitutional investors entering the sector in that period.<\/p>\n