The cryptocurrency landscape is in a constant state of flux, defined by a perpetual tug-of-war between two dominant forces: Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs). For years, CEXs like Binance and Coinbase have held the lion's share of the market, serving as the primary gateways for fiat-to-crypto onboarding. However, the rise of DeFi (Decentralized Finance) has propelled DEXs like Uniswap and PancakeSwap into the spotlight, challenging the status quo.
Understanding the shifting market share trends between these two models is crucial for anyone involved in the crypto space, from a novice buying their first Bitcoin in Ho Chi Minh City to a seasoned whale managing a diverse portfolio in Hanoi. This article dives deep into the data, the technology, and the user behaviors driving this evolution, providing a roadmap for the future of digital asset trading.
The Tale of Two Models: CEX and DEX Defined
Before we analyze the trends, let's clarify the fundamental differences. This distinction is vital for beginners entering the market.
Centralized Exchanges (CEXs) function like traditional stock exchanges or banks. A third-party operator manages the platform, holds custody of your funds, and facilitates trades.
- Pros: High liquidity, fiat support (buying crypto with VND via bank transfer), user-friendly interfaces, customer support.
- Cons: Custodial risk ("Not your keys, not your coins"), susceptible to hacks, strict KYC (Know Your Customer) requirements.
- Examples: Binance, Coinbase, HIBT.
Decentralized Exchanges (DEXs) operate without a central authority. Smart contracts on a blockchain automate trades directly between users (peer-to-peer).
- Pros: Non-custodial (you keep control of your funds), privacy (no KYC usually required), access to early-stage tokens.
- Cons: Can be complex to use, slower transaction speeds, higher fees during network congestion, no customer support.
- Examples: Uniswap, Jupiter, Raydium.
Platforms like HIBT bridge this gap by offering the security and ease of a CEX while providing access to the vast array of assets often found in the decentralized world.
Historical Dominance: The Reign of the CEX
For the first decade of cryptocurrency, CEXs were the undisputed kings. In 2019, CEXs accounted for over 99% of all crypto trading volume. The reason was simple: usability. Early DEXs were clunky, slow, and expensive. For a user in Vietnam wanting to convert VND into USDT, a CEX was the only viable option.
The CEX model thrived on trust and convenience. They offered robust mobile apps, credit card integration, and the assurance that if you forgot your password, someone could help you reset it. This user experience moat kept DEXs at bay for years.
However, the "Summer of DeFi" in 2020 began to chip away at this dominance. The introduction of Automated Market Makers (AMMs) revolutionized DEX trading, making it faster and ensuring constant liquidity without the need for traditional order books.
The Turning Point: DEXs Rise to Prominence
The market share gap has been narrowing significantly. In recent years, we have seen DEX volume spikes that rival top-tier centralized exchanges.
Key Drivers of DEX Growth:
- The Collapse of Trust: The spectacular failure of FTX in 2022 was a watershed moment. Millions of users lost funds held on a centralized platform. This triggered a massive migration toward self-custody and DEX usage. The mantra "verify, don't trust" became a survival guide.
- Regulatory Pressure: As governments worldwide, including regulators in Southeast Asia, tighten scrutiny on CEXs, users seeking privacy or those in restricted regions have flocked to DEXs.
- Innovation in Solana and Layer-2s: The rise of high-speed blockchains like Solana and Ethereum Layer-2 solutions (Arbitrum, Base) has solved the high-fee problem. Trading on a Solana DEX like Raydium is now instantaneous and costs fractions of a cent, rivaling the CEX experience.
- Memecoin Mania: The explosive popularity of memecoins (e.g., PEPE, BONK, WIF) often starts on DEXs. CEXs are slower to list these high-risk assets due to compliance checks. Traders chasing 100x gains go where the action is: on-chain.
Case Study: The Solana DEX Explosion
In late 2023 and early 2024, the Solana ecosystem experienced a resurgence. DEXs on Solana, such as Jupiter and Orca, frequently surpassed Ethereum mainnet DEXs in daily volume. More shockingly, on certain days, Jupiter's trading volume exceeded that of Uniswap and even approached the spot volume of major CEXs. This proved that when fees are low and the UX is smooth, users are willing to trade on-chain en masse.
Current Market Share Trends (2024-2025)
While DEXs have grown, CEXs still dominate the overall volume, particularly for major pairs like BTC/USDT and ETH/USDT.
- Spot Volume Ratio: As of early 2025, the spot trading volume ratio of DEX to CEX hovers around 15% to 25%. This is a massive increase from the <1% seen five years ago.
- Derivatives Dominance: CEXs still hold a massive lead in derivatives trading (futures and options). High-frequency trading and leverage require the speed and liquidity depth that centralized matching engines provide best. However, decentralized perpetual exchanges (Perp DEXs) like GMX and dYdX are steadily climbing.
The Vietnamese Context:
In Vietnam, the trend mirrors the global shift but with local nuances. Vietnamese investors are known for being tech-savvy and having a high risk tolerance. Consequently, there is high adoption of DEXs for hunting "hidden gems" (early-stage tokens). However, CEXs remain the primary hub for storing wealth and cashing out to fiat. Platforms that cater to local needs, such as HIBT, remain essential for the daily operations of Vietnamese traders, offering a secure environment to manage portfolios before venturing on-chain.
Why CEXs Are Not Going Anywhere
Despite the "DEX Revolution" narrative, Centralized Exchanges are evolving, not dying. They are becoming hybrid financial hubs.
- Fiat On/Off Ramps: You cannot buy crypto on Uniswap with a bank transfer from a Vietnamese bank account. CEXs are the necessary bridge between the traditional economy and the crypto economy.
- Cross-Chain Simplification: Moving assets from Ethereum to Solana to Bitcoin requires complex bridging on-chain, which is risky for beginners. CEXs handle this backend complexity, allowing users to deposit BTC and withdraw SOL seamlessly.
- Institutional Custody: Big money (ETFs, hedge funds) requires regulated, insured custody. They cannot simply store billions on a Ledger wallet. CEXs provide the institutional-grade infrastructure required for mass adoption.
- Integrated Ecosystems: Modern CEXs are not just for trading. They offer staking, Earn products, launchpads for new tokens, and educational resources. HIBT exemplifies this by providing a comprehensive suite of tools that allows users to earn yield on their assets while waiting for trading opportunities.
The Hybrid Future: Convergence
The strict line between CEX and DEX is blurring. We are moving toward a hybrid future.
- CEXs Integrating Web3 Wallets: Major exchanges now have "Web3" tabs in their apps, allowing users to interact with DeFi protocols directly from their CEX interface.
- DEXs Improving UX: DEXs are adopting "account abstraction," allowing users to log in with email and pay gas fees in any token, mimicking the easy experience of a CEX.
Security: The Ultimate Deciding Factor
For the Vietnamese market, security is paramount. The memory of hacks and scams is fresh.
- CEX Security: Reputable exchanges investing heavily in security, Proof of Reserves (PoR), and insurance funds are winning trust back. HIBT prioritizes asset protection with multi-layer security protocols, ensuring that users can trade with peace of mind.
- DEX Security: Smart contract risk is the biggest threat. If a DEX's code has a bug, the entire liquidity pool can be drained. Users must learn to read audits or use trusted aggregators.
Case Study: The Curve Finance Hack vs. CEX Resilience
In 2023, Curve Finance, a pillar of DeFi, suffered a hack due to a vulnerability in the programming language Vyper. Millions were lost. Contrast this with top-tier CEXs that successfully thwarted numerous cyber-attacks in the same period using advanced intrusion detection systems. This highlights that while "self-custody" prevents exchange collapse, it introduces "code risk."
What Should You Choose? A Guide for Vietnamese Investors
Choose a CEX (like HIBT) if:
- You are a beginner buying your first crypto.
- You need to convert VND to crypto or vice versa.
- You want to trade actively with high leverage.
- You prefer having customer support if something goes wrong.
- You want a simple, all-in-one mobile app experience.
Choose a DEX if:
- You want to buy a token that just launched and isn't listed on major exchanges yet.
- You are deeply concerned about privacy and want no KYC.
- You want to participate in on-chain governance or yield farming.
- You are comfortable managing private keys and understanding blockchain gas fees.
The Professional Approach:
Most successful investors use both. They use a CEX like HIBT for their fiat ramp and major holdings (BTC/ETH), and they keep a portion of their portfolio in a Web3 wallet to interact with DEXs for speculative plays. This "barbell strategy" balances security, convenience, and opportunity.
Conclusion: The Expanding Pie
The "CEX vs. DEX" debate is often framed as a zero-sum game, where one must lose for the other to win. The reality is that the entire crypto pie is growing. As global adoption increases, both CEXs and DEXs will see volume growth.
By 2030, we may stop distinguishing between them entirely. We will simply have "trading interfaces." Some will be fully custodial, some non-custodial, and many will be hybrids. For the Vietnamese market, staying educated on these trends is key to financial sovereignty. Whether you prefer the autonomy of a DEX or the robust support of a platform like HIBT, the most important step is to participate responsibly.
About the Author
Dr. Alistair R. Vance
Dr. Alistair R. Vance is a distinguished cryptographer and financial economist with over 15 years of experience in distributed ledger technology. He holds a Ph.D. in Computational Finance from MIT and has authored over 40 peer-reviewed papers on blockchain scalability and decentralized market structures. Dr. Vance previously served as the lead auditor for several top-10 DeFi protocols and advises central banks on digital currency integration. He is currently a Senior Fellow at the Institute for Decentralized Economics.