Decentralized Trading Platforms (DEX) See an Increase in Trading Volume Amidst Regulatory Measures Against Centralized Trading Platforms

According to reports, as US regulatory agencies take measures against centralized trading platforms including Kraken, Coinbase, and Binance, decentralized trading platforms (DEX) saw a significant increase in cryptocurrency trading volume in March. According to DeFiLlama’s data, DEX’s trading volume increased to $133.1 billion in March, the third consecutive month of growth.

DEX transaction volume increased to $133.1 billion in March

As regulatory agencies in the United States take measures against prominent centralized trading platforms like Kraken, Coinbase, and Binance, decentralized trading platforms (DEX) have witnessed a significant increase in cryptocurrency trading volume in March. According to DeFiLlama’s data, DEX’s trading volume increased to $133.1 billion in March, marking the third consecutive month of growth.

Overview

With the cryptocurrency market gaining mainstream attention, regulatory agencies across the globe have started to clamp down on trading platforms to protect consumer interests and minimize fraud. This has led to increased scrutiny of the security framework and other features of centralized trading platforms.
In recent times, regulatory agencies within the US have started taking regulatory measures, which has progressively hampered the growth of these centralized exchanges. However, this scenario has been a boon for decentralized trading exchanges as they have witnessed a surge in trading activity in the past few months.

What Are Decentralized Trading Platforms?

Decentralized trading platforms, or DEXs, are digital currency exchanges that enable P2P transactions without the intervention of intermediaries, making them less susceptible to hacking and market manipulation. DEX works on the cutting-edge blockchain technology, thereby securing transactions and ensuring the security of traders’ data. In a decentralized platform, users own their private keys and enjoy a high degree of anonymity.

Regulatory Measures Against Centralized Trading Platforms

The regulatory steps taken against centralized trading platfroms have come from both government and non-governmental organizations. For instance, the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have initiated several probes and investigations to monitor trading activities, ensure better security frameworks, and reduce the number of insider trading cases.
Consequently, the regulatory measures have limited or squeezed the transaction activities of centralized trading platforms. For instance, reports showed that Coinbase Pro exchange saw a 2% decline in average daily trading volume between February and March of this year.

The Rise of Decentralized Trading Platforms

The decline of trading activities in centralized trading platforms has led to a boost in decentralized trading platforms. Despite the present volatile situation within the crypto exchange space, decentralized platforms have remained resilient while displaying tremendous growth potential.
Data from DeFiLlama shows that decentralized trading platform’s trade volume reached a record $133 billion in March, which reflects a 53% increase from February’s trade volume of $70 billion. While there is no particular data set for DEX, the broad assessment clearly shows that Decentralized platforms are witnessing increased transactions as centralized platforms are taking a hit.

Benefits of Decentralized Trading Platforms

With the ongoing regulatory measures and a trend toward a more decentralized financial system, many traders have started to do business on DEXs. Some of the key benefits of using decentralized trading platforms include:
– Increased security – considering the decentralized nature of these platforms, they are more secure with less chance of developing a lot of loopholes in the system.
– Privacy – traders have a high degree of privacy and anonymity as they control their private keys, which reduces the chance of hacking attacks.
– More focus on Post-Trade Settlements – the blockchain technology ensures that the trade settlement times are faster, reducing time and cost incurred in trade.

Conclusion

With the regulatory measures taken against centralized trading platforms, we have seen a rise in decentralized trading platforms, which continue to witness more transactions, helping bring out a paradigm shift in the financial sector. Decentralized platforms are here to stay, and traders and investors would have to learn to adapt to this changing landscape.

FAQ

#Q1. How can I convert my cryptocurrency to fiat using a Decentralized Trading Platform?

The process of converting cryptocurrency to fiat on a decentralized platform is straightforward. You can sell on a decentralized platform and request the funds to your local or bank accounts.

#Q2. What is the difference between centralized and decentralized exchanges?

The fundamental difference between centralized and decentralized exchanges is the intermediary party. Centralized exchanges have intermediary parties, while decentralized exchanges offer direct peer-to-peer transactions.

#Q3. What are some of the promising DEX available in the market?

Some of the top DEXs available in the market include Uniswap, PancakeSwap, SushiSwap, and Curve.