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DEX tokens outperformed the centralized exchange tokens 5 times

June 11, 2020

So far, the yields for decentralized exchange tokens (DEX) have been more than five times higher than for centralized counterpartsAccording to the latest DeFi report from the cryptocurrency research platform Messari.

DEX tokens have risen by an average of 241% so far this yearWhile centralized exchange tokens have only increased by 44%.

And that doesn’t include some recent increases. The report said that Kyber Token (KNC) led the charge with an increase of over 420%However, after publication of the report, the price of KNC almost doubled and the LRC rose 46%, while the main centralized exchange tokens shrank on average.

DEX tokens outperformed the centralized exchange tokens 5 timesDEX tokens outperformed the centralized exchange tokens 5 times

DEX tokens outperform centralized counterparts five times over

DEX tokens are five times more numerous than their centralized counterparts. Source: Messari

DEX spot volume increased from $ 5 million to $ 25 million;; DEX’s share of the total trading volume rose to 0.5%, twice as high as in the previous year (0.25%). Although still minimal compared to centralized exchanges, DEXs They grow much faster, in part due to the contribution of DEX aggregatorswho spread token swaps across multiple DEXs to get the lowest prices for traders. Messari researcher Jack Purdy explained::

“One factor that contributes to this is the increasing importance of DEX aggregators as @ 1inchExchange and @DEXAG_TokenWire. “

The report says that Almost all major DEXs have been or will shortly be subjected to a comprehensive update that increases scalability and liquidity incentivesand this increases interest in their respective tokens.

Major upgrades are planned or completed for most top DEXs

Major planned or completed improvements to most major DEXs. Source: Messari

Although the volume is still small compared to popular central exchanges like Binance and Huobi, Purdy holds as Other factors capture the real value of these exchanges::

“When we look at the ‘profits’ of centralized exchanges, DEXs still have a long way to go to emulate this type of value […] An advantage of DEXs, however, is that they do not depend on the existence / good faith of a centralized entity […] This could be scalable both economically and in terms of user trust. “

Worth burning tokens?

Centralized exchanges use a token burning process in which they increase the price of tokens by reducing the offer. However, this process is entirely at the discretion of the organization, and token holders rely on a central location to balance liquidity as the token value increases.

Compared, DEX tokens have greater potential (and potentially higher risk).. Given the relatively low trading volume with DEXs, sustained growth could exponentially increase token holders’ profits.