Decentralized Exchanges Beat Centralized Counterparts for On-Chain Flows: Chainalysis

The data raises questions about regulation surrounding DEXs.

AccessTimeIconJun 6, 2022 at 12:00 p.m. UTC
Updated May 11, 2023 at 4:14 p.m. UTC

Decentralized crypto exchanges (DEXs) have their pros (limitless crypto trading pairs) and their cons (difficult onboarding experiences) when compared to the centralized exchanges (CEXs) of the world. Nonetheless, they are rising in popularity.

From April 2021 to April 2022, Web 3 users sent $224 billion in on-chain value to DEXs, outstripping centralized exchanges like Coinbase, which combined for $175 billion over the same period, according to a new report from Chainalysis.

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.

Chainalysis Economist Ethan McMahon told CoinDesk that the move from CEXs to DEXs began in 2020’s DeFi Summer and carried through the non-fungible token (NFT) boom of 2021. DEXs first cleared 50% market share in September 2020, according to the report. In June 2021, this number hit its peak at 80%.

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.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Cam Thompson is a news reporter at CoinDesk.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.