Bitget Wallet’s View on DEX and CEX Dynamics
Jamie Elkaleh, the Chief Marketing Officer of Bitget Wallet, noted that while decentralized exchanges (DEXs) are drawing significant interest from retail traders and Quant, institutions continue leaning toward centralized platforms.
Elkaleh shared with Cointelegraph that the primary users driving the adoption of platforms like Hyperliquid are retail traders and para-experts. Retail participants are particularly attracted to Airdrop cultures and point systems. Meanwhile, Quant provides advantages such as low rates, quick transactions, and programmable strategies.
Despite this, he emphasized that institutional desks still depend on centralized exchanges (CEXs) for essential services like Fiat rail support, compliance, and prime brokerage.
He remarked that the quality of execution between DEXs and CEXs is improving fast. “Order book-based DEXs such as Hyperliquid, Dydx V4, and GMX are beginning to match the latency and depth previously exclusive to CEXs,” he explained.
DEXs Aim to Match CEX Speed with On-chain Transparency
Hyperliquid, a prominent DEX platform, operates on its chain and features an on-chain central limit order book. Elkaleh mentioned, “Every order, cancellation, and transaction can be fully audited. We aim to maintain decentralization without sacrificing performance.”
The platform strives to offer the speed of a CEX while maintaining a self-sustaining approach, achieving transaction finality in just one second without imposing gas fees per trade. However, competition is heating up, with Aster emerging as a formidable opponent on the BNB chain.
Elkaleh noted, “Aster’s incentive programs have recently driven its daily volume to new heights, even surpassing some established players on particular days.” Data from Defillama indicated that Aster recorded approximately $47 billion in PARP volume within a single day.
The rise of DEXs based on BNB and Solana is quite remarkable. The BNB PERP protocol has seen daily sales reaching between $6 billion and $70 billion, while platforms like Drift and Jupiter’s PURPs are steadily claiming a foothold. Elkaleh explained that these ecosystems gain from quick transactions, easy onboarding, and attractive incentives.
That said, DEXs aren’t without their concerns. Elkaleh pointed out risks tied to the centralization of validators or sequencers, potential Oracle failures, upgrade key vulnerabilities, and bridge weaknesses. He raised a critical issue surrounding the maintenance of a reliable liquidation engine during volatility.
Last Friday, Aster had to refund traders who faced issues due to glitches in Plasma’s permanent market (XPL), where unexpected surges led to liquidations and additional fees.
The Coexistence of DEXs and CEXs
Looking forward, Elkaleh mentioned he hasn’t assessed the outcome of Zerosum but believes DEXs represent the future of trading infrastructure. “DEXs are indeed the path forward for trade rails driven by code,” he stated. “However, CEXs remain vital for Fiat liquidity and onboarding.”
He concluded by suggesting that over the next decade, a hybrid model could emerge that leverages the strengths of both systems, fostering a balanced ecosystem where coexistence, rather than replacement, shapes the future of cryptocurrency markets.
