Citigroup drew attention to the difference between centralized and decentralized cryptocurrency exchanges, which are also behind various altcoin projects, in a research report. Decentralized exchanges (DEXs) have grown faster than centralized exchanges (CEXs) over the past two years, according to the bank’s findings. Users are moving away from centralized platforms to avoid more cumbersome know-your-customer procedures. Therefore, the difference is likely to increase. Here are the details…
Citibank compared exchanges in Bitcoin and altcoin markets
DEXs are far from the traditional approach of acting as financial intermediaries between buyers and sellers. Instead, it controls trading among many users using automated algorithms. The report stated that DEXs offer token holders distributed income and storage, such as dividends. Citi added that these exchanges have relatively lower fees than platforms like Coinbase Pro when trading rewards are included.
The bank said that one of the main differences between DEXs and CEXs is the security in hiding assets. He highlighted the collapse of Celsius Network and Voyager Digital as an example. The bank expects a potential rise for DEX volumes in the near term. He also said there has been an increase in regulation. According to the bank, users may not respond well to KYC requirements, which will become aggravated as crypto regulation evolves. It may begin to move from “KYC-intensive CEXs” to DEXs. According to the memo, the regulatory environment is expected to become more “grueling”. Therefore, more users are expected to move from centralized to decentralized exchanges.
Uniswap is the leader among DEXs
Citi emphasized that DEXs are responsible for 18.2 percent of spot trading volume. He noted that volumes remained resilient at over $50 billion per month, with total revenues of $3.6 billion last year. Uniswap continues to dominate DEXs, accounting for around 70 percent of the total DEX volume. In addition, the bank drew attention to the decentralized finance (DeFi) field, which enables commercial transactions without the need for traditional tools. Sharing positive views on the DeFi space, the bank pointed out that DEXs could be an important “pivot” for DeFi.
DEX and CEX altcoins
Based on the above Citibank comments, it can be deduced that the bank is bullish for DEX coins. Because if the activity and volume towards DEXs increases, the altcoins of the exchanges tend to benefit from it. These cryptocurrencies are used as management tokens in accordance with decentralized management. well cryptocoin.com As we have also reported, token holders get the chance to vote on changes in the ecosystem. We can give the following examples of the largest DEX coins:
- Uniswap (UNI)
- PancakeSwap (CAKE)
- Curve DAO Token (CRV)
- 1inch Network (1INCH)
- THORChain (RUNE)
- Balancer (BAL)
- Serum (SRM)
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