Relating to buying and selling memecoins, time is cash — and ready on a centralized change (CEX) might price 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 accordance with HypeStat.com. Based in 2014, CoinGecko has grown into one essentially the most trusted sources for crypto market knowledge.
Ong and I had really scheduled the decision earlier than Christmas, so it was pure coincidence that Trump simply occurred to launch his memecoin a couple 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 among the sharpest observers of how buying and selling habits evolve on the grassroots stage. When he began CoinGecko, it was to resolve his personal drawback — again then, crypto value monitoring was rudimentary, and there wasn’t a approach to analyze market depth, liquidity, developer exercise or neighborhood engagement. He wished higher insights, so he and his co-founder constructed the software themselves.
Ong is predicated 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 arising and each of us slated to be audio system, we deliberate to debate crypto adoption traits in Asia. However we ended up speaking in regards to the issues with CEX.
DEX enchantment
For CEX customers, waking up on Monday was a brutal realization: they’d already missed out on almost 41,000% in potential beneficial properties. 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 couple of years in the past, when DEXs have been thought-about too advanced for the common dealer to make use of. However that’s now 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 other people gravitate to that — that’s what I’m seeing available in the market proper now,” Ong advised 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 achieved $1.76 trillion in quantity all on their very own. Moreover, in This autumn 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 purposes. Wallets like Phantom and Jupiter are designed to be user-friendly for cell buying and selling, which is important since most individuals at present commerce primarily by way of cell apps. Ong famous that the consumer 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 for those who have 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 a lot 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 should spend as a lot effort and time onboarding.
I recalled writing about Axie Infinity again in 2020 and the way troublesome 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 folks overcame these preliminary hurdles, the subsequent wave of initiatives might construct on that basis, benefiting from an already-educated consumer base. Over time, the problem shifted from onboarding noobs to refining the expertise and increasing what’s potential on-chain.
Caught between regulators and a tough place
As DeFi turns into extra consumer pleasant, and customers get friendlier with DeFi, Ong advised 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 may ever want multi function handy place. However with all that being unbundled by DeFi, which might now be accessed by way of the primary interface of a DEX in a consumer’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 sensible contract-based non-custodial DEX — the place tokens turn 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 all the time allowed the buying and selling of high-risk belongings however its latest itemizing of speculative AI tokens similar to ChainGPT (CGPT) and Cookie DAO (COOKIE), in addition to rising AI-driven initiatives similar to aixbt by Virtuals (AIXBT), suggests a shift to cater to hype-driven, short-term buying and selling. Some critics have referred to 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 type of haven’t any alternative 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 don’t seem to be buying and selling on Binance,” stated Ong.
In the meantime, Binance’s regulatory troubles have been mounting. In mine and Bobby’s dwelling area, nations together with Singapore, Malaysia, Thailand, the Philippines and Indonesia all have clear licensing necessities for crypto exchanges, with Vietnam anticipated to affix them this yr. Clearly, the extent of regulation varies between these nations, with some being extra relaxed and a few extra strict, however the level is, it is now not a grey space.
This leaves a jurisdictionally fluid CEX like Binance within the precarious place of working in regulatory limbo, continuously going through restrictions, bans or compelled exits from key markets. In contrast, DEXs haven’t any central entity to manage them. And not using a 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 overwhelm CEXs.
“Have you learnt 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 dwelling to an enormous inhabitants of tech-savvy children desirous to discover new monetary alternatives however (except Singapore) the area gives restricted choices for high-yield investments. In contrast to within the U.S., the place retail traders loved 23%-plus returns within the S&P 500 in each 2023 and 2024, folks within the East face vital boundaries to accessing such markets — for context, we don’t have any native equal the place retail traders can cheaply and simply commerce shares by way of platforms like Robinhood. Most fairness buying and selling platforms in Southeast Asian markets have excessive boundaries to entry —steep charges, lack of fractional shares, strict laws and restricted entry to world 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 way more than the house of a weekend? And whereas the crypto trade tries to shake its repute for hypothesis, that speculative attract is strictly what retains folks coming in.
These markets matter to exchanges — CEXs, DEXs and all the things in between — as a result of nations with massive populations like India, Indonesia, Vietnam and the Philippines are prime looking grounds for consumer 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 revenue so that they have interaction with crypto in largely transactional methods, looking airdrops for survival. Incomes $50 to $100 from an airdrop isn’t a bonus for many individuals dwelling in these nations — it may be lease, meals or a full month’s wages. Nevertheless, whereas this drives engagement, the participation is usually momentary and pushed by quick monetary wants reasonably than long-term funding or platform affinity.
“Plenty of them are simply there to generate income. They’re not even excited by decentralization or the expertise. It is actually simply in regards to the monetary returns for a lot of of them,” stated Ong. And whereas CEXs serve this viewers nicely for on/off ramps, for these in search of the very best rewards, DEXs are the place the stakes — and the upside — are highest.
As such, at present’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 individual financial institution.” They’re decentralized for one motive: the cash.
And whereas poor monetary literacy and FOMO usually result in losses, I personally don’t consider in shielding folks from threat by making these markets inaccessible. Excessive boundaries basically say “You’re poor and uneducated, so you may’t take part,” robbing folks of the possibility to study—even when meaning making errors. Conventional finance does the identical factor by proscribing startup investments to accredited traders, supposedly for defense, however in actuality, simply preserving the very 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 pace, 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.