The cryptocurrency industry is gaining significant attention daily, with more users registering with various platforms to buy, sell, and trade digital assets. The industry is divided into two halves, the Centralized and the Decentralized parts, referred to as CEX and DEX, respectively.
They represent two different ways of supporting transactions in it. In this article, we will understand the statistical data to under the potential each one possesses.
Decentralized Exchange Overview (DEX):
The DEX exchanges have experienced a significant drop of over 10% in valuation during January compared to December's performance. This highlights a rise in the digital assets outflow, indicating a switch of interest among the investors.
Further, due to the rise in market volatility, the inflow and outflow volumes took a hit of more than -5%, suggesting an increase in the investors holding onto their digital assets.
Total Value Locked (TVL):
Despite significant price volatility in the crypto industry, the Decentralized Financial (DeFi) system has displayed a rise of $3.895 Billion in valuation, from $117.54 Billion during the month's start to $121.435 Billion on 31st January, a jump of 3.313% Month-on-Month (MoM).
Top subparts of the category have displayed a volatile price action, indicating a mixed sentiment in the market. Further, the lower cap chains have outperformed the top chains regarding monthly gains with few experiencing returns of over 2X in valuation.
DEX Volume:
The crypto market entered the first month of 2024 at high volatility and displayed significant price action during this time. Looking at the Month-on-Month (MoM), the DEX volume has recorded a drop of 13.8596% in its total valuation, from $84.49 billion during the month's start to $72.78 billion by the month's end
Ocra recorded the highest loss out of the top five with a correction of 34.081%, from 48.67 Billion to $44.9 Billion this month alone. Following this, PancakeSwap recorded a loss of 16.458%. Uniswap And Maker PSM displayed similar trends, with both recording a correction of 7.746% and 7.14% in their respective values.
On the other hand, Curve recorded a stable month as it recorded the least loss of 2.941% among the top ones. However, others recorded a collective loss of 32.023% this month, making it a negative start to the year.
DEX Share Volume:
Despite Uniswap recording a loss in volume, it has managed to raise the highest shares in the market among the top five. Uniswap jumped from 57.63% to 61.71%, a jump of 4.08% during this time, making it the topic gainer in this subpart for the month.
Following this, Curve has displayed a rise of 0.52% in the chart, making it one of the only two Decentralized exchanges (DEX) to record a positive month in the market for this subpart.
On the other hand, Orca has recorded the highest correction among the top five exchanges, with a loss of 2.73% in value, from 11.59% at the month's start to 8.86% during the month-end. Other DEX exchanges recorded a loss of 1.68% Month-on-Month (MoM).
DEX To CEX Spot Trade Volume:
DEX to CEX Spot trade volume is the monthly Decentralized (DEX) volume divided by the Centralized exchange (CEX) volume to calculate the percentage. The calculation includes the top exchange of both parts.
The DEX to CEX spot trading volume has recorded a decline in volume during the first month of the year by 0.18%, from 7.88% to 7.70%, which was recorded on 31st January.
DEX Mechanism Volume Share:
The DEX mechanism volume share includes Constant Product Conservation Function (CP), Hybrid mechanisms that are mixed between different approaches, and Central Limit Order Books (OB) which when combined represent the total volume share within the Decentralized exchanges.
The Constant Product subpart experienced a rise from 78.21% to 81.5%, a jump of 4.206%. Moreover, Order Book recorded the highest rise of 14.772%, a jump from 0.88% to 1.01% over the past month. Conversely, the Hybrid mechanism recorded a loss of 16.355% during the same time frame.
Centralized Exchange Overview (CEX):
Centralized exchanges have recorded massive fluctuations in their valuations due to the increase in price volatility which resulted in major exchanges concluding the month in red.
On the other hand, Binance, after experiencing constant regulatory pressure throughout 2023, continues to lose its market grip by displaying a notable fall during the first month.
Proof-of-Reserve (PoR):
The current valuation of Proof-of-Reserve stands at $71.388 Billion. Bitcoin with 34.22%, holds the highest token allocation in the space, followed by USDT with a hold of 26.29% of the total shares.
The leader of altcoins, Ethereum, stands third with a share of just over 10% at 10.23%. The BNB and AETH hold 4.19% and 2.62%, respectively, whereas other tokens hold a total of 22.46%.
| Sl.no | Exchange Reserve | Aggregated Balance |
| 1. | Binance | $27.9 Billion |
| 2. | OKX | $5.62 Billion |
| 3. | Deribit | $1.51 Billion |
| 4. | Crypto.Com | $1.29 Billion |
| 5. | Bitstamp | $970 Million |
The above table consists of the top five exchange reserves of the industry with Binance dominating the other tokens with an aggregated balance of $27.9 Billion which sums up to a total of 39.082% of the total valuation.
The OKX exchange stands second with a balance of $5.62 Billion, followed by Deribit and Crypto.Com with a value of $1.51 Billion and $1.29 Billion respectively. Bitstamp stands fifth with a value of just under $1 Billion at $970 Million.
Revenue:
The Centralized exchanges over the past week have recorded 4 out of 7 green days, 2 out of 7 red days, and 1 neutral day on the daily P&L. The 29th Jan experienced the highest single-day P&L with a gain of $1.644B whereas the cumulative P&L stood at $1.523B.
Conversely, the crypto industry concluded the month with a red day as the daily P&L recorded a loss of $1.649B with a cumulative gain of $298.335 Million in valuation.
Inflow and Outflow:
The crypto market recorded a highly volatile month with major cryptocurrencies experiencing significant fluctuations in their respective values. Moreover, the Bitcoin exchange inflow recorded an average daily inflow of 40,349.290 for January.
Further, the single highest inflow received by Bitcoin was on 12th January with an exchange flow of 70.892.96 and a Price USD of 42,780.38. On the other hand, the lowest was recorded on the 21st with an exchange flow of 18,265.67 and a Price USD of 41,567.28.
Looking at the Outflow chart, the Bitcoin exchange outflow recorded an average daily outflow of 40,389.870, indicating a minor increase in the total volume.
The single highest outflow received by Bitcoin was on 12th January with an exchange flow of 68,292.338 and a Price USD of 42,780.38. On the other hand, the lowest was recorded on the 21st with an exchange flow of 18,811.47 and a Price USD of 41,567.28.
Exchange Volume
Looking at top cryptocurrency spot exchanges, Binance stands first with an impeccable score of 9.9, average liquidity of 886, and 400 coins backed by it. Despite having the least weekly visits of 68,781 and 239 coins, Coinbase Exchange stands second with a score of 8.4 and average liquidity of 734.
Kraken stands third with an average liquidity of 765, a score of 8.3, and 249 coins. KuCoin and Bybit stand fourth and fifth with scores and average liquidity of 7.5 and 7.4, 567, and 629, respectively.
Conclusion
The Decentralized exchanges (DEX) are still in an early stage as they roughly hold 15% of the total market share. Further, the rising volatility in the industry and constantly changing rules and regulations have started pushing investors toward the world of DEXs.
Although both exchanges have their own pros and cons in their respective fields, it is highly recommended to place your trades with caution as exchanges are not liable for any transfers made by the crypto holder.