Gate Research Institute: The Ecological Pattern and Integration Trends of CEX and DEX

Introduction

In recent years, the development of the digital asset market has made the roles of Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) a core topic of interest for investors and researchers. Although the market has a certain understanding of these two trading modes, the impacts and differences between them in different application scenarios are still worth exploring in depth.

Over the past two years, the usage rate of DEX has significantly increased globally, with more and more investors starting to accumulate experience and reflections through on-chain trading and wallet management, indicating that decentralized trading is rapidly emerging. However, despite the rapid growth of DEX, CEX, as a traditional and widely adopted trading model, still holds an irreplaceable importance. In terms of compliance, liquidity, and user experience, the advantages of CEX remain evident, and many businesses and investors rely on it far more than the general market perception.

Therefore, "the comparison between CEX and DEX" is not only a matter of choosing trading tools, but also a key judgment concerning industrial structure and future trends. This article will systematically analyze the current development status and potential of both through multi-dimensional data comparison, covering user scale and penetration rate, market structure and trading patterns, security, and global compliance layout. Through comparison and cross-observation, we can gain a clearer understanding of the prevalence, risk differences, and interactions between CEX and DEX in the global cryptocurrency market, thereby providing a reference for subsequent market research and strategic layout.

Encrypted User Data Analysis: Market Penetration Rate and Growth Trends

Global crypto user exponential growth

According to the estimates based on Crypto penetration rates, growth trends, market performance, and Demandsafe forecast data, the global number of cryptocurrency users has shown exponential growth over the past decade. The number of users surged from approximately 1 million in 2013 to 670 million by 2025, with an impressive annual growth rate. Especially after 2020, the user curve accelerated sharply, marking the transition of the crypto market from early experimentation to large-scale mainstream adoption.

This trend indicates that cryptocurrencies have transformed from niche experiments into an undeniable force within the global financial system. The large user base not only provides a solid foundation for emerging sectors such as DeFi, NFTs, and Web3, but also strengthens network effects and market liquidity. As the number of users continues to expand, the potential of the crypto market in application scenarios such as financial inclusion, cross-border payments, and digital identity will be further unleashed, driving the global digital economy towards a more mature and widespread stage.

Global Penetration Rate and Regional Distribution: The Rise of Emerging Markets

From a regional distribution perspective, there is a significant difference in the penetration rate of cryptocurrency users.

• High Penetration Markets: South Korea (27%), UAE (25.3%), Singapore (24.4%), Turkey (19.3%), indicating that cryptocurrency technology has become highly prevalent in these markets.
• Emerging Markets: Argentina (18.9%), Thailand (17.6%), Brazil (17.5%), Vietnam (17.4%), Indonesia (13.9%), all with penetration rates higher than the global average, where cryptocurrency is seen as an important tool for financial inclusion.
• Developed Markets: The penetration rates of the United States (15.5%) and Canada (10.1%) are relatively moderate, but they still occupy a core position in the global cryptocurrency market due to capital, technology, and institutional adoption.

This pattern indicates that the driving forces behind the adoption of cryptocurrency vary across different regions: emerging markets primarily rely on financial alternatives and inclusive demand, while developed markets are more driven by institutional adoption and technological innovation. The globalization process of cryptocurrency is accelerating under multiple drivers.

Comparison of CEX and DEX User Scale

From 2020 to 2024, both centralized exchanges (CEX) and decentralized exchanges (DEX) have maintained rapid user growth:

• DEX Users: The number of active addresses annually increased from 9.3 million in 2020 to 143 million in 2024, achieving more than a tenfold growth over four years, demonstrating a strong growth momentum.
• CEX Users: The number of active users annually increased from 22.5 million in 2020 to 120 million in 2024, still showing significant growth, indicating that centralized platforms continue to hold a key position in the cryptocurrency market.
• Trend Evolution: Before 2020, the user base of CEX was always higher than that of DEX; however, starting in 2021, the user base of DEX began to surpass that of CEX, and a significant gap formed in 2022. Although the gap narrowed later, it is expected to widen again in 2024. As the decentralized ecosystem matures, users are gradually shifting from centralized platforms to the Web3 ecosystem, but the user base of both types of platforms is significantly expanding.

This change reveals that:

• User habits are shifting —— More and more crypto users are inclined to use DEXs, seeking greater transparency and autonomy;
• The market landscape is becoming more diversified —— CEX remains the mainstream entry point, but the rise of Web3 and decentralized applications is reshaping the user structure.

Overall, the user base of the crypto market is expanding from traditional centralized platforms to a decentralized and open Web3 ecosystem, with the market development direction increasingly showing characteristics of diversity and decentralization.

Global Asset Market Capitalization Trends: The Rise of Cryptocurrency

Cryptocurrency Moving Towards Global Core Assets (2013–2025)

Over the twelve years from 2013 to 2025, the global asset market capitalization landscape underwent profound reshaping. Traditional hard currencies like gold and silver continued to grow steadily, but at a relatively slower pace, with their market share gradually diluted. Meanwhile, tech giants experienced rapid expansion in market capitalization, particularly Microsoft and Nvidia, which surged after 2020, highlighting that cutting-edge technologies such as artificial intelligence and cloud computing are becoming the core engines of global economic growth.

The most noteworthy point is that cryptocurrencies have experienced explosive growth since 2020, quickly becoming mainstream in the global asset market. By 2025, their total market capitalization reached $3.02 trillion, successfully surpassing Apple to become the fourth largest asset class in the world, only behind gold, Nvidia, and Microsoft. Among them, Bitcoin (BTC) has a market capitalization of $2.35 trillion, surpassing Amazon and silver; Ethereum (ETH) has a market capitalization close to $980 billion; and the total market capitalization of stablecoins has also reached $260 billion.

Overall, the core of global assets is gradually shifting from traditional hard assets to high-growth innovative assets. The rise of cryptocurrencies not only demonstrates the enormous potential of digital finance but also signifies that it has now equaled gold and tech stocks, becoming a new pillar of global capital allocation.

The Stage-wise Transition and Future Trends of Global Asset Market Value Pattern (2022–2025–2030)

By analyzing snapshots of market capitalization at key time points, it is clear to see how cryptocurrencies have grown from niche assets to a core category capable of competing with the world's leading tech giants. In August 2022, the global asset landscape was still dominated by traditional assets: gold led by a wide margin at $11.77 trillion, followed closely by Apple and Microsoft. At that time, the total market capitalization of cryptocurrencies was about $1.08 trillion, which, while substantial, still placed it in a secondary position comparable to that of silver ($1.38 trillion).

However, in just three years, there have been tremendous changes. By August 2025, driven by the dual forces of the artificial intelligence wave and the cryptocurrency bull market, the global asset landscape has been completely rewritten. The market value of gold has risen to $22.93 trillion; Nvidia, with its leading advantage in the AI field, saw its market value soar to $4.24 trillion. During this period, the performance of cryptocurrencies has been particularly remarkable, with a total market capitalization reaching $3.02 trillion, historically surpassing silver and Amazon, officially entering the core echelon of global assets.

In the future, this trend is expected to deepen, with forward-looking forecasts indicating that by 2030, the total market value of cryptocurrencies is likely to reach $41.80 trillion, becoming the second largest asset class globally after gold. This exponential rise reflects a large-scale migration of global capital adapting to the digital age, where the composition of top assets has evolved from being predominantly traditional hard assets to a diversified new pattern characterized by a tripartite balance of traditional assets, tech giants, and digital assets.

Evolution of Internal Structure in the Cryptocurrency Market: The Dynamic Balance between CEX and DEX

Meanwhile, the internal market structure of cryptocurrencies is also maturing and balancing. In the past, asset custody and liquidity almost entirely relied on centralized exchanges (CEX); however, by 2025, the landscape has evolved into a "dual-track model" where CEX and decentralized exchanges (DEX) run in parallel. Data shows that in 2022, the total asset reserves of CEX and DEX were approximately $118 billion, with CEX holding an absolute dominance; however, by 2025, the total asset scale has soared to $560 billion, and the Total Value Locked (TVL) of DEX has significantly increased, nearly matching the reserves of CEX.

This structural change does not signify a weakening of the importance of CEX, but rather marks the maturation of the cryptocurrency market. On one hand, the overall market size is rapidly expanding, providing ample growth space for both CEX and DEX; on the other hand, the increasing share of DEX assets reflects the prosperity of the DeFi ecosystem, technological advancements, and users' preference for asset self-custody and on-chain transparency. Meanwhile, the role of CEX is also evolving: it is no longer the sole trading center but serves as the "core gateway" connecting the real world with the on-chain economy, undertaking key functions such as fiat currency deposits and withdrawals, new user education, and institutional compliance entry.

Therefore, the crypto market is gradually forming a "dual-track infrastructure"—CEX as the entry point and hub for global capital, and DEX as the core carrier of on-chain finance and innovation. The two are not mutually exclusive but rather complement each other, together forming the dual foundation of the future crypto financial system.

Token Issuance and Ecological Prosperity

The number of token issuances has shown an extremely rapid growth trend in the past few years. Especially after the "DeFi Summer" of 2020, decentralized exchanges (DEX) have gradually become the main channel for new token issuances. Today, the volume of tokens issued on DEX has reached an astonishing level, with over fifty thousand new tokens launched every day, and the estimated number of new tokens for the entire year of 2025 will exceed eight million, with a cumulative issuance scale reaching tens of millions. In contrast, while CEX still has a large number of tokens going online, its issuance speed and quantity have clearly lagged behind that of DEX.

The change in this issuance model has brought about two aspects of impact:

Innovation and prosperity enhancement: The openness of DEX provides a broader stage for developers and entrepreneurial teams. New projects can quickly go live and enter circulation, promoting the diversified development and rapid iteration of new tracks such as GameFi, DeFi, and SocialFi.

Risk and Quality Differentiation: Due to the almost non-existent barriers to entry, most tokens on DEX have limited scale and short lifespans, resulting in a market filled with "long-tail projects" and high risks. In contrast, CEX still screens projects through a strict review mechanism; although the number of issuances is lower, the quality and credibility of the tokens are higher.

In terms of proportion, the vast majority of new tokens are currently issued on DEX, while the share of CEX has fallen to less than 1%. This indicates that DEX has taken a leading position among the driving factors for the prosperity of the token ecosystem. However, at the same time, CEX still possesses irreplaceable value in terms of "selected projects," brand reputation, and compliance assurance.

In the token issuance scale of various Launchpads in Web3, more than half comes from DEX. This indicates that the prosperity of the ecosystem is shifting from a single model to a dual-track pattern where both CEX and DEX coexist.

The Evolution Trend of Market Domination

The competitive relationship between CEX and DEX in terms of trading volume and market dominance is gradually evolving. Overall, CEX remains the core force in the market, but the market share of DEX is continuously increasing, and the gap between the two is gradually narrowing.

spot trading

Currently, CEX accounts for about 77% of the global spot trading volume, while DEX accounts for 23%. However, if we exclude the impact of wash trading, data that better reflects the true retail activity indicates that CEX accounts for 58% and DEX accounts for 42%. This means that in actual user-driven trading, DEX is closing the gap with CEX, demonstrating a rapid catching-up trend.

annual trading volume

Over the past decade, the annual trading volume gap between CEX and DEX has gradually narrowed. Although CEX is still larger in absolute terms, DEX is growing at a faster rate, and there have even been periods and emerging asset classes where it has approached or surpassed CEX. Meanwhile, in terms of Total Value Locked (TVL), CEX once held an absolute advantage, but now the TVL of DEX has approached that of CEX, creating a situation of a balanced power structure.

Future Trends of Market Dominance

In the short term, CEX will continue to maintain its dominant position due to its strong liquidity, compliance qualifications, and better user experience, especially in regions with strict regulations. In the medium to long term, as blockchain infrastructure continues to improve, users' awareness of autonomous asset management increases, and the security and usability of DEX continue to enhance, its market share is expected to expand further. In the next 5-10 years, DEX may potentially get closer to or even challenge the dominance of CEX.

In summary, the market is gradually transitioning from a "CEX absolute dominance" to a bipolar pattern of "CEX leading + DEX rapidly catching up". CEX maintains its scale and compliance advantages, while DEX represents the forefront of decentralized philosophy and ecological innovation.

Security Risks and Compliance Trends in the Cryptocurrency Ecosystem

hacker incident and fund loss

Between 2023 and 2025, crypto assets continued to suffer from large-scale thefts. According to Chainalysis data, approximately 59% of the stolen assets came from DEX/Web3 protocols, with losses amounting to $5.9 billion, highlighting the inadequacies of security mechanisms in decentralized systems. The main types of attacks include smart contract vulnerabilities, cross-chain bridge security failures, and governance design flaws, which put Web3 at greater risk in terms of fund security. In contrast, CEXs, while also facing centralization risks, have a relatively mature security system, resulting in a lower proportion of fund losses.

At the same time, personal wallet theft has gradually become a new frontier in crypto crime. As of June 2025, attacks on personal user wallets have accounted for over 20% of all stolen fund activities. Due to their covert nature, related incidents are often underreported, but the level of risk is continuously rising. The main factors driving this trend include: enhanced security capabilities of large platforms, forcing attackers to turn to individual users; the expanding population of cryptocurrency holders; the increasing value of personal wallet assets as market prices rise; and hackers using emerging tools like LLM to make attack techniques increasingly complex.

Against the backdrop of an increasing number of personal wallet attacks, MetaMask has become one of the most representative cases. Starting from the end of 2024, the incidents of abnormal fund theft encountered by MetaMask users have significantly increased, continuing to rise in 2025. Some attacks have caused nearly 500 wallets to be victimized in a single day, demonstrating that hackers have developed the capability to target large user groups through systematic means. In contrast, although there were sporadic peaks in mid-2022 and late 2023, both the frequency and severity were far lower than the current levels, indicating an evolution in the threat model.

Potential reasons for this phenomenon include: vulnerabilities in wallet software that can be systematically exploited, security risks of third-party infrastructure (such as browser extensions or malicious dApps), and the larger pool of attack targets formed as the user base expands. Overall, cases related to MetaMask indicate that widely used wallet applications are becoming key targets for hackers, and as cryptocurrency applications become more popular, such attacks may further spread in the future.

In summary, the current security risks in the cryptocurrency ecosystem are showing characteristics of scale expansion and diversification of methods, with the focus gradually shifting towards individual users. The industry needs to advance security strategies in two aspects simultaneously: first, service-oriented platforms should continuously strengthen infrastructure protection, including smart contract auditing, cross-chain bridge security validation, and multi-signature mechanisms for hot wallets, to reduce systemic risks; second, the education and protection of individual users also need to be enhanced concurrently, covering operational security (OpSec), the use of cold wallets, and prevention against social engineering attacks.

At the same time, regulatory bodies may need to gradually promote compliance requirements for DeFi protocols and wallet applications, seeking a balance between transparency and decentralization to reduce the infiltration of illegal funds through on-chain channels. These risk characteristics also provide important context for subsequent money flow and money laundering analysis.

Money Laundering and Cryptocurrency Fund Flows

Between 2021 and 2024, approximately $50 billion in illegal funds are laundered and defrauded each year through cryptocurrency channels, with CEX still being the primary recipient of these funds. However, with the development of DeFi and non-KYC platforms, on-chain protocols have gradually become an important outlet for illegal funds, especially during active market phases, where the participation ratio of DeFi has significantly increased. The lack of identity verification and the convenience of cross-chain anonymity make DEX more vulnerable in AML (Anti-Money Laundering) risk management.

During the period from 2024 to 2025, different types of attacks exhibited differentiated money laundering paths. Attackers on service-type platforms were more likely to use cross-chain bridges and mixers to transfer funds, while stolen funds from personal wallets often flowed into token smart contracts and CEX. It is noteworthy that the cost of money laundering has not decreased due to advancements in blockchain technology; rather, it has increased due to the pursuit of speed and irreversibility. From 2022 to June 2025, the average transaction costs on the blockchain decreased by over 80% due to technological advancements in Solana and Layer 2, but the fees paid by operators of stolen funds surged by over 100%. Additionally, not all funds circulate immediately; as of June 2025, over 37% of the funds stolen from personal wallets remained in the attackers' addresses, showing a hoarding characteristic.

Overall, crypto money laundering is showing characteristics of increasingly complex pathways, high premium on fund transfers, and the stabilization of tools like stablecoins. Although technology has reduced the cost of legitimate transactions, illegal funds incur even higher costs in exchange for efficiency and concealment. This raises higher demands on regulation and enforcement regarding cross-chain tracking, mixer monitoring, and the regulation of sanctioned entities, and also indicates that future compliance pressure on the DeFi and stablecoin ecosystem will further increase. This highlights the core role of compliance frameworks in industry risk management.

Compliance Response and Global Layout

In the context of evolving security risks and money laundering pathways, compliance has become a key area distinguishing CEX from DEX. CEX (such as Gate) is gradually establishing compliance frameworks and licensing systems globally to meet the AML/KYC requirements of different jurisdictions. This layout encompasses diverse business forms such as trading, custody, and derivatives, and also means that CEX must fulfill obligations like information disclosure, customer identity verification (KYC), transaction monitoring, and anti-money laundering reporting. By establishing a global compliance framework, CEX can enhance user trust at the institutional level and lay the foundation for cross-regional business expansion and long-term development.

In contrast, the operational model of DEX presents significant differences. Due to the lack of centralized legal entities and a unified cross-border regulatory framework, most DEXs have not established mandatory compliance mechanisms and typically do not conduct KYC or identity verification. This openness and anonymity provide users with greater freedom, but also create a clear gap in AML risk management. Relevant data shows that the proportion of illicit funds circulating in DEXs has been rising year by year, especially during market volatility phases, making DEXs more susceptible to becoming important channels for fraud and hacker funds. Therefore, compliance is not only a regulatory benchmark for industry differentiation but will also become an important determining factor in the evolution of the future market landscape.

Conclusion

The comparison between CEX and DEX is reflected not only in the differences in trading models but also profoundly mirrors the multi-dimensional evolution of the crypto industry in terms of user growth, market structure, security risks, and compliance frameworks. Over the past decade, the exponential expansion of user scale has driven the crypto market from a niche experiment to a global mainstream, while the rapid rise of DEX and the steady expansion of CEX have together shaped the current diverse and coexisting market landscape.

However, security and compliance have always been key variables in the development of the industry. Hacking incidents, personal wallet thefts, and the complexities of cross-chain money laundering paths reveal the vulnerabilities of DeFi and DEX in risk management; meanwhile, CEX provides relatively robust guarantees at the institutional and trust levels through global compliance layouts and more mature security protection systems. This difference also means that the two types of platforms will play different roles in future market competition and regulatory environments.

Looking to the future, CEX and DEX are not merely in a substitutive relationship, but are more likely to form a complementary and coexisting ecological pattern. The advantages of CEX in compliance, liquidity, and user trust will continue to support its position as the mainstream entry point in the market; meanwhile, DEX will drive the development of token issuance and emerging applications through its openness and innovation capabilities. As the user base continues to expand and regulatory policies gradually improve, finding a balance between transparency, efficiency, and risk control will determine whether the cryptocurrency industry can enter a more mature and sustainable phase.
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Disclaimer Investing in the cryptocurrency market involves high risks. Users are advised to conduct independent research and fully understand the nature of the assets and products they are purchasing before making any investment decisions. Gate does not assume any responsibility for losses or damages resulting from such investment decisions.