Liquidity in Crypto: CEX vs. DEX – Where Are Traders Winning?
In early 2025, DEXs surpassed 20% of total spot crypto trading volume for the first time, more than double 2024.
This shift is huge. It shows that decentralized exchanges (DEXs), once considered niche, are gaining ground in a market historically dominated by centralized exchanges (CEXs) like Binance and Coinbase. For traders, this isn't just a statistic. It's a sign that crypto is forking in a new direction.
Image: Monthly decentralized exchange volume divided by centralized exchange volume (as a percentage)
CEXs are the heavyweights of crypto trading. But DEXs offer more control, security, and broader token access. Could they eventually match or even surpass CEXs in terms of liquidity depth and user adoption?
Crypto trading happens primarily in two ways: on-chain through decentralized exchanges (DEXs) or off-chain via centralized exchanges (CEXs). Historically, CEXs have dominated the market, but the tides are shifting. As DEXs improve in both user experience and liquidity, traders are rethinking where they execute their trades. Let’s break down the key differences and see where the real advantages lie.
Why CEXs Have Dominated
Centralized exchanges like Binance, Coinbase, and Kraken have long been the default choice for crypto traders. Why? Because they offer a fast, simple, and feature-rich experience. Their intuitive interfaces make onboarding easy, and they provide advanced tools like margin trading, derivatives, and limit orders—features that decentralized exchanges (DEXs) have struggled to match.
Since CEX transactions happen off-chain, trades execute almost instantly with no gas fees. This means lower costs and higher frequency, allowing more market makers and high-volume traders to participate, creating deep liquidity and high trading volumes.
But convenience comes at a cost. CEXs are custodial, meaning users must trust the exchange to safeguard their assets–A major risk based on recent history. Token coverage is also limited on CEX as only tokens listed by the CEX are tradable (in contrast to anything with liquidity on DEX).
The DEX Comeback
DEXs run on-chain. Meaning everything runs on smart contracts, providing greater transparency and security. DEXs have long faced challenges—complex onboarding, fragmented liquidity, front-running, and limited liquidity. But things are changing. UX improvements, lower gas costs, faster chains, the increased importance of self-custody and the almost limitless number of tradable tokens have fueled rapid growth in DEX adoption. As a result, DEX trading volume recently surpassed 20% of total crypto volume, doubling year-over-year
Where Are Traders Winning? CEXs or DEXs?
CEXs Win On:
- Lower Costs, Faster Trades: Reduced fees and quick execution drive deeper liquidity.
- User Experience: Easy onboarding and intuitive interfaces.
- Leverage: Cross-margin and derivatives.
DEXs Win On:
- Self-Custody & Security: Full control over assets.
- Larger Token coverage: Access more assets, including emerging tokens.
- DeFi Opportunities: Access to yield farming, staking, and more.
Shifting Tides
In Q1 2024, DEXs made up just 9.3% of total crypto trading volume, while CEXs dominated. But that’s changing. By January 2025, DEXs surpassed 20% for the first time.
Uniswap, a major DEX, now sees daily trading volumes over $2 billion.
The figures are comparable to mid-tier CEXs like Kraken. However, CEXs like Binance still lead, with $24 billion in daily volume as of February 13, 2025.
Why Choose? Get the Best of Both Worlds with Terrace
While both CEXs and DEXs have their strengths and weaknesses, traders shouldn’t have to choose between them. Fragmented liquidity, varying prices, and asset availability make it difficult for users to maximize their trades efficiently.
Terrace: The Best of CEX and DEX
Terrace eliminates the need to pick sides by seamlessly integrating CEX and DEX liquidity. Here’s how it works:
- Best Prices & Deepest Liquidity: Terrace routes trades across over 50 CEX and DEX venues to ensure optimal pricing.
- More Token Access: Trade major tokens like BTC alongside newer assets typically found only on DEXs.
- Self-Custodial Security: Keep full control of your assets while benefiting from top-tier liquidity.
The Future of Trading
As DEXs continue to improve, the divide between centralized and decentralized liquidity is closing. With solutions like Terrace, traders can have the best of both worlds—access to deep liquidity without sacrificing security or flexibility. The crypto landscape is evolving, and smart traders are evolving with it.
About Terrace
Terrace is an all-in-one trading terminal, broker, and portfolio management system that aggregates centralized and decentralized liquidity and abstracts away wallets, chains, and venues. Terrace offers better prices, deeper liquidity, and broader asset coverage than any CEX, DEX, or MM.
To learn more about Terrace, visit:
