With regards to buying and selling memecoins, time is cash — and ready on a centralized alternate (CEX) might value you each. Take $TRUMP, for instance. On Jan. 17, 2025, simply earlier than his inauguration, Donald Trump launched his memecoin on Solana, which surged previous a $14.5 billion peak market cap on decentralized exchanges (DEXs) like Raydium and Orca inside little greater than 24 hours, making it the second largest memecoin behind Dogecoin at one level.
By the point the key CEXs listed $TRUMP a day or two later — having cleared the same old bureaucratic rigmarole — the motion was over. As such, for speculators, DEXs aren’t simply sooner; they’re extra liquid, extra unstable and albeit, extra enjoyable. In a market the place fortunes are made in minutes if not milliseconds, ready for a CEX to catch up is a missed alternative.
On the Monday morning following $TRUMP memecoin mania, I spoke with Bobby Ong, co-founder of CoinGecko, the impartial crypto knowledge aggregator that has lengthy been my private go-to for checking token costs — together with roughly 40 million different month-to-month guests, in line with HypeStat.com. Based in 2014, CoinGecko has grown into one probably the most trusted sources for crypto market knowledge.
Ong and I had truly scheduled the decision earlier than Christmas, so it was pure coincidence that Trump simply occurred to launch his memecoin a number of days earlier. Once we spoke, we each had the identical response: What the hell simply occurred?
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I’ve identified Bobby for years—he’s a real OG, having first purchased bitcoin in 2013, and is likely one of the sharpest observers of how buying and selling habits evolve on the grassroots stage. When he began CoinGecko, it was to unravel his personal downside — again then, crypto value monitoring was rudimentary, and there wasn’t a method to analyze market depth, liquidity, developer exercise or group engagement. He wished higher insights, so he and his co-founder constructed the instrument themselves.
Ong relies in Malaysia, whereas I’m within the Philippines, so we’ve each spent years in Asia’s crypto scene, watching firsthand how the area has formed — and been formed by — crypto. With Consensus Hong Kong developing and each of us slated to be audio system, we deliberate to debate crypto adoption traits in Asia. However we ended up speaking concerning the issues with CEX.
DEX attraction
For CEX customers, waking up on Monday was a brutal realization: they’d already missed out on practically 41,000% in potential positive factors. This was significantly intestine wrenching because it wasn’t simply one other obscure memecoin popping off in some area of interest nook of the web; it was a headline-dominating asset tied to the newly re-elected U.S. president, and nonetheless, CEXs couldn’t transfer quick sufficient.
In the meantime, in simply 72 hours, Solana’s DEX customers recorded an unprecedented $28 billion in buying and selling quantity, largely pushed by $TRUMP and the fast-following $MELANIA token. This stage of DeFi engagement was unimaginable barely a number of years in the past, when DEXs had been thought-about too advanced for the common dealer to make use of. However that’s not the case, which means that DeFi isn’t simply a substitute for CEXs; it’d simply overtake them.
“The expertise with decentralized exchanges is superior in comparison with centralized exchanges, and folks gravitate to that — that’s what I’m seeing out there proper now,” Ong instructed me.
How occasions have modified
Again in 2020, CoinGecko’s Yearly Crypto Report confirmed that whereas mixed CEX and DEX buying and selling volumes surged by $403 billion to $534 billion, CEXs accounted for 93% of that progress. Quick-forward to 2024 and that identical annual report revealed that the highest 10 spot DEXs had finished $1.76 trillion in quantity all on their very own. Moreover, in This fall of 2024, Solana overtook Ethereum for the primary time because the dominant chain, reaching $219.2 billion in DEX buying and selling quantity, or over 30% of all DEX trades, in comparison with Ethereum’s $184.3 billion.
Notably with Solana, the ecosystem has been constructed with a powerful emphasis on cell functions. Wallets like Phantom and Jupiter are designed to be user-friendly for cell buying and selling, which is vital since most individuals immediately commerce primarily via cell apps. Ong famous that the person expertise for cell wallets has improved considerably, which in flip has enhanced the general on-chain expertise.
“Beforehand, we solely had MetaMask on desktop, and whereas there was a MetaMask cell pockets, it wasn’t very user-friendly,” he stated. “However in case you take a look at Ethereum now, you’re seeing a shift — Uniswap has its personal cell app, [non-custodial] Coinbase Pockets has improved and there are lots of others like Rainbow. The general pockets expertise has gotten significantly better in comparison with earlier than, when MetaMask was one of many solely choices.”
Ong additionally famous the friction concerned in getting new customers on-chain, however identified that after onboarded, they study the ropes, enabling them to navigate the ecosystem independently. Which means future initiatives don’t must spend as a lot effort and time onboarding.
I recalled writing about Axie Infinity again in 2020 and the way tough it was for gamers to earn Axie’s in-game token, then sync and swap it to Ethereum after which commerce it on Uniswap — it was an extremely difficult, multi-step course of. However as soon as individuals overcame these preliminary hurdles, the subsequent wave of initiatives might construct on that basis, benefiting from an already-educated person base. Over time, the problem shifted from onboarding noobs to refining the expertise and increasing what’s attainable on-chain.
Caught between regulators and a tough place
As DeFi turns into extra person pleasant, and customers get friendlier with DeFi, Ong instructed me he sees these developments as an existential risk to the CEX enterprise. He likened the CEXs to a giant grocery store with spot and futures, staking and all of the issues you possibly can ever want multi function handy place. However with all that being unbundled by DeFi, which may now be accessed by way of the principle interface of a DEX in a person’s cell pockets, the CEXs should work out the place they’re going to sit down.
That’s particularly the case for CEXs that function in jurisdictions the place they lack full regulatory approval, like Binance, OKX and ByBit, since they’ll neither onboard shitcoins immediately like a wise contract-based non-custodial DEX — the place tokens change into tradable as quickly as liquidity is added — nor supply fiat on/off ramps like a licensed CEX.
This leaves them greedy at straws, determined to keep up relevance. Ong gave an instance: Binance has at all times allowed the buying and selling of high-risk property however its latest itemizing of speculative AI tokens reminiscent of ChainGPT (CGPT) and Cookie DAO (COOKIE), in addition to rising AI-driven initiatives reminiscent of aixbt by Virtuals (AIXBT), suggests a shift to cater to hype-driven, short-term buying and selling. Some critics have known as this out as a departure from Binance’s historically selective requirements and a transfer to chase buying and selling quantity amid rising DEX competitors.
“They kind of don’t have any selection as a result of if persons are buying and selling these tokens on their very own wallets on Metamask, or Aerodrome on Base, then they aren’t buying and selling on Binance,” stated Ong.
In the meantime, Binance’s regulatory troubles have been mounting. In mine and Bobby’s house area, international locations together with Singapore, Malaysia, Thailand, the Philippines and Indonesia all have clear licensing necessities for crypto exchanges, with Vietnam anticipated to affix them this 12 months. Clearly, the extent of regulation varies between these international locations, with some being extra relaxed and a few extra strict, however the level is, it is not a grey space.
This leaves a jurisdictionally fluid CEX like Binance within the precarious place of working in regulatory limbo, consistently dealing with restrictions, bans or compelled exits from key markets. In contrast, DEXs don’t have any central entity to manage them. With no firm or headquarters to license or prohibit, they exist purely as good contracts on a blockchain, permitting them to facilitate buying and selling with out the identical compliance burdens that crush CEXs.
“Are you aware of any nation that’s getting anyplace near regulating DeFi?” I requested. “No,” stated Bobby, mentally chalking up one other win for DEXs.
Why DEXs are dominating in Asia now
Southeast Asia is house to an enormous inhabitants of tech-savvy kids desperate to discover new monetary alternatives however (except for Singapore) the area gives restricted choices for high-yield investments. Not like within the U.S., the place retail buyers loved 23%-plus returns within the S&P 500 in each 2023 and 2024, individuals within the East face vital limitations to accessing such markets — for context, we don’t have any native equal the place retail buyers can cheaply and simply commerce shares by way of platforms like Robinhood. Most fairness buying and selling platforms in Southeast Asian markets have excessive limitations to entry —steep charges, lack of fractional shares, strict rules and restricted entry to international equities. As a substitute, crypto has crammed the hole.
The place else are you able to see a token like $TRUMP explode from $7 to $75 in not far more than the area of a weekend? And whereas the crypto trade tries to shake its popularity for hypothesis, that speculative attract is precisely what retains individuals coming in.
These markets matter to exchanges — CEXs, DEXs and every part in between — as a result of international locations with massive populations like India, Indonesia, Vietnam and the Philippines are prime looking grounds for person acquisition. These areas supply immense scale, however the problem lies within the spending energy of those customers.
GDP per capita is comparatively low, and plenty of people lack vital disposable earnings so that they have interaction with crypto in principally transactional methods, looking airdrops for survival. Incomes $50 to $100 from an airdrop isn’t a bonus for many individuals residing in these international locations — it may be lease, meals or a full month’s wages. Nevertheless, whereas this drives engagement, the participation is commonly momentary and pushed by quick monetary wants relatively than long-term funding or platform affinity.
“A whole lot of them are simply there to earn cash. They’re not even concerned with decentralization or the know-how. It is actually simply concerning the monetary returns for a lot of of them,” stated Ong. And whereas CEXs serve this viewers properly for on/off ramps, for these looking for the very best rewards, DEXs are the place the stakes — and the upside — are highest.
As such, immediately’s degens aren’t essentially ideologically-driven just like the early Bitcoiners who championed “don’t tread on me” beliefs or the ethos of “be your personal financial institution.” They’re decentralized for one cause: the cash.
And whereas poor monetary literacy and FOMO usually result in losses, I personally don’t consider in shielding individuals from danger by making these markets inaccessible. Excessive limitations basically say “You’re poor and uneducated, so you possibly can’t take part,” robbing individuals of the prospect to study—even when meaning making errors. Conventional finance does the identical factor by limiting startup investments to accredited buyers, supposedly for cover, however in actuality, simply preserving one of the best alternatives for the rich. That, for my part — and in Ong’s too — is essentially unfair.
DEXs have the higher hand proper now. They provide true, open, unrestricted entry to monetary alternative at lightning velocity, permitting anybody, anyplace to get in on the sport. How lengthy regulators will take to catch up is anybody’s guess, however for now, we make hay whereas the Crypto Spring solar shines.
And when the subsequent mega memecoin kicks off, all you really want is a pockets, a DEX and the stamina to fulfill a unending cycle of checking, hoping and coping on CoinGecko.
