EddieJayonCrypto
14 Jan 25
Market trends show that decentralized exchanges (DEXs) have replaced venture capital (VC) markets for token price discovery, while centralized exchanges (CEXs) continue to serve as exit liquidity. Ad Tokens recently listed on Binance are underperforming compared to the broader crypto market, indicat...
Market trends indicate that decentralized exchanges (DEXs) have supplanted venture capital (VC) markets for token price discovery, while centralized exchanges (CEXs) continue to function as exit liquidity. Ad Tokens recently listed on Binance are underperforming compared to the broader crypto market, signaling that price discovery predominantly occurs on DEXs, with traders using CEXs for exit liquidity. This shift is reflected in the on-chain activity, with DEX monthly volume surpassing that of CEX and on-chain derivatives witnessing growth. Furthermore, recent token launches on Binance, such as Pudgy Penguins (PENGU) and ChainGPT (CGPT), have experienced varying degrees of depreciation post-listing, highlighting the distinct price discovery dynamics between DEXs and CEXs. The market shift has been underscored positively, with the influx of "smart money" traders on decentralized exchanges. This shift in price discovery dynamics also signals a healthy market, with centralized exchanges providing essential exit liquidity streams. The on-chain activity in December exemplifies this market shift, with DEXs registering record spot monthly trading volume of $434.4 billion and on-chain derivatives markets capturing nearly $341 billion in volume. As of January 13, the proportion of spot monthly trading volume traded on decentralized exchanges exceeded that of centralized counterparts. However, the ongoing month requires closer observation to gauge the DEX to CEX spot trade volume ratio accurately.