While those figures don’t speak to bottom-line trading volumes, they do highlight how DEXs offer a viable alternative to CEXs. But a transition from CEXs to DEXs raises concerns as to how this growing sector of crypto will be regulated. Decentralized exchanges are self-executing, and for better or for worse lack the human element of centralized exchanges. That means they’re harder to regulate.
When asked about the future DEX dominance, McMahon said regulation will likely play a role in these numbers.
While decentralized exchanges are noncustodial and offer a wider range of currency pairs, according to McMahon, they aren’t as easy to use and do not offer the same regulatory assurance that centralized exchanges do. If DEXs continue to increase in popularity, a regulatory crackdown might be on the way.
“If [regulation] serves as a hindrance, it may actually reduce the market share,” McMahon said.
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