In the wake of the FTX collapse, many anticipated a significant migration of crypto traders from centralized exchanges (CEXs) to decentralized exchanges (DEXs). However, recent data paints a different picture—one where Coinbase, a leading centralized platform, has not only maintained its dominance but has also surpassed Uniswap in trading volume, challenging assumptions about the future of decentralized finance.
According to analytics from Kaiko, a prominent crypto data firm, Coinbase’s trading volume reached approximately $93 billion** year-to-date, nearly doubling **Uniswap’s $57 billion. This shift is notable given that in 2022, the two platforms saw comparable activity levels, sparking early speculation about a potential tipping point toward decentralization.
Why DEX Adoption Has Slowed Despite FTX Fallout
When FTX—a major centralized exchange—collapsed in late 2022, it triggered widespread distrust in custodial platforms. Many in the crypto community predicted a surge in decentralized exchange usage, driven by a desire for self-custody and reduced reliance on centralized intermediaries.
While there was a brief spike in DEX activity—**DefiLlama data showed November 2022 volumes hitting $113 billion**, the highest since May that year—momentum has since cooled. Current daily volumes suggest this month is unlikely to surpass $100 billion, indicating a plateau or even reversal in the trend.
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Conor Ryder, research analyst at Kaiko, notes that predictions of a full-scale shift to DEXs may have been premature.
“Presumably the average investor is still put off by the worse user experience on some of these DEXs, compared to the more straightforward experience on CEXs,” Ryder said via direct message. “I think CEXs will always be an essential part of the exchange landscape, whether we like it or not.”
User Experience: The Deciding Factor
One of the most significant barriers to DEX adoption is usability. Platforms like Uniswap require users to manage private keys, interact with smart contracts, and navigate complex interfaces—steps that can be intimidating for newcomers.
In contrast, Coinbase offers a streamlined onboarding process similar to traditional financial or tech platforms. Users can sign up with an email, link a bank account, and begin trading within minutes—all without needing to understand blockchain mechanics.
Lucas Outumuro, head of research at IntoTheBlock, emphasizes this disparity:
“Getting onboard into Coinbase is much more similar to what people are used to with other tech or finance platforms, whereas getting into Uniswap is a completely different flow. This makes adoption take a little longer as new users may feel intimidated.”
Data supports this sentiment. IntoTheBlock reports that while the number of newly created Ethereum addresses spiked to 228,000 per day on November 24, 2022—a high not seen since May 2021—it has since dropped to under 90,000 daily, signaling waning organic growth in DeFi participation.
Institutional Hurdles and Systemic Risks
Beyond retail adoption, institutional investors remain cautious about engaging with DEXs. A November 2022 report by JPMorgan strategists highlighted several structural limitations:
- Slower transaction speeds
- Lack of advanced order types (e.g., limit orders, stop-loss)
- Reliance on price oracles fed by centralized exchanges
- Vulnerability to smart contract exploits
- Requirement for over-collateralization in DeFi protocols
- Systemic risks from automated liquidations
These factors make DEXs less attractive for large-scale or algorithmic trading operations. As JPMorgan noted:
"While there has been some increase in the share of DEX in overall crypto trading activity in recent weeks, this is more likely to reflect the collapse in crypto prices and the deleveraging/automatic liquidations that followed the FTX collapse."
In other words, the temporary rise in DEX volume may have been more about market distress than genuine preference.
Core Keywords Driving Market Understanding
To better understand this dynamic, it's essential to recognize the core keywords shaping the conversation:
- Decentralized exchanges (DEX)
- Centralized exchanges (CEX)
- Coinbase trading volume
- Uniswap vs CEX
- DeFi adoption challenges
- Crypto exchange usability
- FTX collapse impact
- Institutional crypto trading
These terms reflect both user intent and the broader narrative around trust, accessibility, and technological maturity in digital asset trading.
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Frequently Asked Questions (FAQ)
Q: Why did people expect DEX usage to increase after FTX collapsed?
A: The FTX collapse eroded trust in centralized custodians. Many believed users would shift to decentralized exchanges to maintain control over their funds and avoid reliance on single points of failure.
Q: Is Uniswap still the largest DEX?
A: Yes, Uniswap remains one of the largest and most widely used decentralized exchanges by volume and liquidity, especially on the Ethereum network.
Q: What makes Coinbase easier to use than Uniswap?
A: Coinbase offers familiar onboarding—email signup, ID verification, bank linking—while Uniswap requires wallet setup, gas fee management, and direct interaction with blockchain protocols.
Q: Can DEXs support advanced trading features like stop-loss orders?
A: Most current DEXs do not natively support stop-loss or limit orders. Traders often rely on third-party tools or move back to CEXs for such functionality.
Q: Are decentralized exchanges safer than centralized ones?
A: While DEXs eliminate counterparty risk from custodians, they introduce smart contract risks and are vulnerable to exploits. Safety depends on protocol audits, user behavior, and technical design.
Q: Will CEXs always dominate crypto trading?
A: For now, yes—especially for retail and institutional traders prioritizing ease of use, liquidity, and regulatory compliance. However, hybrid models may emerge as technology evolves.
The Road Ahead: Coexistence Over Replacement
The data suggests that rather than being replaced, centralized exchanges are adapting and retaining market share. The expectation that DEXs would naturally inherit users post-FTX overlooked a critical factor: user experience matters more than ideology.
While decentralization offers compelling benefits—transparency, censorship resistance, and self-custody—the average trader prioritizes convenience, speed, and reliability. Until DEXs can match CEXs on these fronts without sacrificing security, widespread adoption will remain limited.
That said, innovation continues. Layer-2 solutions, improved wallet interfaces, and intent-based architectures may eventually close the usability gap. But for now, platforms like Coinbase demonstrate that centralized exchanges are far from obsolete.
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Conclusion
The narrative that decentralized exchanges would surge past centralized ones after FTX’s fall has not materialized—at least not yet. With Coinbase’s trading volume nearly doubling Uniswap’s, it’s clear that usability, trust, and infrastructure still favor established CEXs.
While DeFi continues to evolve, real-world adoption hinges on simplifying access without compromising decentralization. Until then, the future of crypto trading appears to be one of coexistence, where both CEXs and DEXs serve distinct but complementary roles in the digital asset ecosystem.