DEX activity increases as retail investors seek early access to tokens

Decentralized exchanges are undervalued and gaining momentum, with volumes hitting all-time highs.

These are the findings of Messari researcher Kunal Goel, who said that centralized exchanges (CEX) are listing tokens too late in a post on X on 13 August.

He added that they are becoming a “dumping ground for VCs” and that retail will learn sooner or later that they will no longer participate in this dynamic.

DEXs give retail traders a better chance to buy new tokens because they are listed earlier, he said.

They are sleeping DEX.

CEXs are introducing coins too late and are becoming a dumping ground for VCs. Retail will learn sooner or later and stop participating in this dynamic.

On the other hand, DEXs list coins earlier; this gives the opportunity to buy retail.

🚀 Unsurprisingly, DEX… pic.twitter.com/Vbd472m2x6

— Kunal Goel (@kunalgoel) August 13, 2024

DEXs could improve

The researcher said that there were several advantages that DEXs have over CEXs. These include an improved on-chain user experience in terms of speed and cost, as well as better wallet integration and reliability.

A DEX does not shut down during times of market turbulence, while centralized exchanges, such as Coinbase as a prime example, can suffer outages during periods of peak volume. However, the values ​​of DEX tokens have not reflected these advantages and many of them have collapsed to bear market levels.

Goel said that could change for several reasons. First, DEXs filter Miner Extractable Value (MEV), so keeping that would give them additional revenue.

New tokenomics models are being developed to capture and distribute cash flows, and the potential integration of features such as perpetual trading could also give DEXs a boost. He concluded with a prediction that all assets will be tokenized on DEX in the future.

“DEXs are fundamental financial primitives and perhaps the most successful crypto product. Currently, they serve circular crypto speculation, but in the future, all assets will be tokenized and DEXed.

DEX volume increased in 2024

According to DeFiLama, the daily volume of DEX is around $5.25 billion. It has more than doubled since 2023, when average daily volumes approached $2 billion. In terms of market share, DEXs currently hold around 21% of the crypto exchange market compared to their centralized counterparts.

Uniswap is the largest DEX, with a daily volume of $1.48 billion and a market share of 28%. PancakeSwap is second, with about $600 million in daily volume and an 11.6% share of the DEX market.

CoinGecko has a slightly lower total daily volume figure for decentralized exchanges at $4.65 billion, but also includes Uniswap as the market leader.

It reports a DEX token market cap of $14 billion, which represents just 0.6% of the total crypto market.

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