Decline in DEX Market Share

Decentralized exchanges (DEXs) are losing ground to centralized exchanges (CEXs) in the futures trading market. In September, the share of DEXs in futures trading volume dropped to 3.26%, down from a peak of 5.18% in February. This decline indicates a gradual shift in preference towards CEXs, although DEXs are still performing better than in previous years.

Liquidity Issues and User Experience Challenges

DEXs face liquidity challenges, with order books often significantly thinner than those of their centralized counterparts. This results in less favorable pricing and higher slippage for larger trades. Additionally, DEXs struggle with user experience, as managing gas fees and interacting with smart contracts can be complicated, especially for new traders.

Future Outlook for DEXs

While DEXs promise true decentralization, they need to address their liquidity issues and improve user interfaces to gain more market share. Enhanced liquidity provision mechanisms and more user-friendly platforms could help DEXs better compete with CEXs in the future.
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