The debate over whether centralized (CEXs) or decentralized exchanges (DEXs) will steer the next crypto cycle sharpened after two pivotal developments: an intruder drained about 1.5 billion USD from Bybit in February 2025 and DEX spot turnover rose 25% in Q2 2025 while CEX spot turnover fell 28%.
These shifts are reshaping liquidity, institutional trust, and the choices of users and custodians, placing a spotlight on how security, depth, and fees affect market structure. The question now is which model adapts faster to set the tone for the next phase.
Context and impact: CEXs vs DEXs
CEXs still command deeper order books, fiat ramps, and advanced interfaces, and for those reasons institutions keep most of their flow on centralized venues.
DEXs are narrowing the gap via Automated Market Makers and shared liquidity pools, which price assets without traditional market makers. An AMM is a contract that quotes a swap price from a fixed formula and on-chain reserves.
Security splits the field: DEXs let users hold their own keys, making a single custodian breach impossible, while CEXs remain high-value targets. The Bybit incident in February 2025 underscores custodial risk.
Trading patterns shifted in Q2 2025: DEX spot volume rose 25% as CEX spot volume fell 28%, and DEXs captured roughly 8% of perpetual futures turnover; CEXs responded by listing DeFi-style products.
Fees have converged: CEXs charge makers 0.174% and takers 0.189%, while DEXs charge makers 0.185% and takers 0.187% plus gas.
Several market effects that will influence adoption, liquidity, and risk management, especially if regulatory treatment for CEXs expands to on-chain protocols.
Key signals remain clear: the Bybit hack highlights custodial risk; Q2 2025 saw DEX spot volume up 25% while CEX spot fell 28%; perpetual DEXs hold about 8% of futures volume; and trading fees are now similar, with DEX users also paying gas.
The race to converge into a hybrid structure where CEX and DEX functions overlap, with regulatory pressure and the capacity of AMMs and liquidity pools to match observed depth in Q2 2025 as the decisive factors.
