Centralized trading platforms are undergoing a collective directional adjustment. From Coinbase spending nearly $2.9 billion to acquire the derivatives trading platform Deribit, and cooperating with Shopify to promote the implementation of USDC in physical merchants. To Binance launching the Alpha plan to reshape the primary market pricing mechanism. To Kraken acquiring NinjaTrader to expand the options market, and cooperating with Backed to carry out the US stock business. And Bybit also opens trading of gold, stocks, foreign exchange and even crude oil indexes on the main site.
The leading trading platforms are actively expanding their sources of income, trying to replenish their business in multiple dimensions, from off-chain to on-chain, from retail investors to institutions, from mainstream coins to altcoins. At the same time, these platforms have also extended their tentacles to the on-chain ecosystem. For example, Coinbases main site has integrated the DEX routing on the Base chain, intending to break through the liquidity barriers between CeFi and DeFi, and regain the transaction share absorbed by on-chain protocols such as Hyperliquid.
However, behind these actions is the continuous pressure on the actual revenue capacity of trading platforms, and crypto trading platforms are facing unprecedented development bottlenecks. Coinbases latest financial report shows that its transaction fee income has been halved from US$4.7 billion in 2024 to US$1.3 billion in Q1 2025, a month-on-month decrease of 19%; among them, the transaction volume share of BTC and ETH has dropped from 55% in 2023 to 36%, and the revenue structure is increasingly dependent on the more volatile altcoin sector. However, operating costs have not fallen back, reaching US$1.3 billion in the first quarter of 2025 alone, almost the same as revenue. Binance also faces the challenge of declining transaction fees. According to the TokenInsight report, its average transaction fee income from the end of 2024 to date has hit a three-year low, although it still leads in market share.
Binances trading volume has been sluggish for most of the past year. Source: coingecko
The space for transaction fees is being compressed, on-chain liquidity is continuously diverted, and traditional brokers are reshaping their compliance. These intertwined forces are forcing CEX to transform into an on-chain platform. Well-known KOL ASH analyzed on X that when more and more DEXs improve their trading mechanisms and produce products with a user experience that is almost comparable to CEX, but the trading process is more transparent. CEX has finally noticed this and shifted its strategic focus to a permissionless model. Many CEXs have started a battle for the on-chain CEX market.
OKX focuses on infrastructure development
In the OKX annual letter dated December 30, 2024, OKX founder Star Xu expressed his firm belief that true decentralization will lead to the large-scale popularization of Web3 and is committed to building a bridge between traditional finance and decentralized finance.
This is not groundless. OKX is one of the earliest and most systematic centralized trading platforms to lay out on-chain infrastructure, except for Binance. It does not launch a wallet or function sporadically, but uses full-stack construction to build a Web3 operating system that can replace centralized scenarios and form a closed loop with CEX user assets.
In the past two years, OKX has continued to promote the strategic construction of its on-chain infrastructure, attempting to transform from a centralized trading platform to a core participant in the Web3 operating system. One of the focuses of its construction is OKX Wallet (a non-custodial wallet that supports more than 70 public chains), which integrates Swap, NFT, DApp browser, inscription tools, cross-chain bridges, and revenue vaults in the Web3 section.
OKX Wallet is not a single product, but the core hub of OKXs Web3 strategy. It not only connects users with on-chain assets, but also opens up the channel between centralized accounts and on-chain identities. Because its components are comprehensive enough, many newcomers who joined the cryptocurrency circle around 2023 used OKX Wallet when they first came into contact with the chain.
On the other hand, OKX has also continued to invest in the underlying network and developer ecosystem. As early as 2020, it launched OKExChain (later renamed OKTC), an EVM-compatible L1 public chain, but the chain has not been highly praised by the market. However, in order to cooperate with the construction of the chain, OKX simultaneously launched basic components such as block browsers, developer portals, contract deployment tools, and faucet services to encourage developers to build DeFi, GameFi, and NFT applications in its ecosystem.
In addition to the continued hosting of hackathons and the launch of ecological support funds, OKX is forming an on-chain ecosystem with a complete closed loop. Although OKX has never publicly disclosed the overall investment amount, considering the construction scale of its wallet, chain, bridge, tools and incentive system, the market generally estimates that its investment in on-chain infrastructure has exceeded US$100 million.
Binance Alpha, the monetization of reputation and liquidity
In 2024, the crypto market ushered in a bull market boom under the dual stimulation of the approval of the Bitcoin spot ETF and the meme craze. Although liquidity has rebounded significantly on the surface, hidden behind the prosperity is the gradual failure of the pricing mechanism between the primary market and the secondary market. Project valuations have been continuously inflated in the VC stage, the coin issuance cycle has been repeatedly extended, and the participation threshold for ordinary users has continued to rise. When the tokens are finally listed on the trading platform, they are often just an outlet for the project party and early investors to cash out, leaving retail investors with price collapse and high-level takeovers after the peak at the opening.
It was in this market environment that Binance launched Binance Alpha on December 17, 2024. Originally an experimental feature in the Binance Web3 wallet for exploring high-quality early-stage projects, it quickly evolved into a key tool for Binance to reshape the pricing mechanism of the primary market on the chain.
In a Twitter Space responding to community controversy, Binance co-founder He Yi publicly admitted that Binances listing of coins had a structural problem of peaking at the opening, and frankly stated that the traditional listing mechanism is no longer sustainable under the current trading volume and regulatory framework. In the past, Binance has tried to use voting for listing and Dutch auctions to correct the pricing imbalance after the listing of new coins, but the results have always been unsatisfactory.
The launch of Binance Alpha has, to some extent, become a strategic replacement for the original coin listing system within a controllable range. Since its launch, Alpha has introduced more than 190 projects from multiple chain ecosystems such as BNB Chain, Solana, Base, Sonic, Sui, etc., gradually forming an early project discovery and preheating platform on the chain led by Binance, providing an experimental path for trading platforms to regain primary pricing power.
After the Alpha Points mechanism was launched, it became a popular place for retail investors to make money, not only for players in the field, but also for the wider Web2. The good returns have led many people to mobilize their entire family, company, or village to participate.
Although it is getting more and more popular now, there are also cases like ZKJ and other tokens plummeting after the alpha is launched, which makes people worry about its compliance. The community has mixed opinions on it. The well-known KOL thecryptoskanda praises Alpha. He believes that Binance Alpha is the second greatest activity innovation of Binance after Binance IEO, and analyzes its role in the ecosystem, Binance Alphas historical mission is to disintegrate the primary pricing power of North American VCs such as A16Z and Paradigm that can raise funds from tradfi at almost no cost, and take back the Binance system. It also rolls up the copycat coin market of other trading platforms to prevent the possibility of Grass appearing on Bybit and causing the hot spots to fall by the wayside, and at the same time, the capital sinks of all chains are turned into Binances capital sinks through BSC. And Alpha has achieved these three goals very well.
Coinbase connects to DEX, and the big players in the exchange give back to Base
Following the footsteps of Binance and OKX, Coinbase has also begun its own integration of the on-chain ecosystem. Their initial strategy is to access DEX transactions and verified capital pools. At the 2025 Cryptocurrency Summit held recently, Max Branzburg, Vice President of Product Management at Coinbase, announced that the DEX on the Base chain will be integrated into the Coinbase main application, and future applications will have built-in DEX transactions.
Trade any on-chain token through Bases native routing and package it into a KYC-verified fund pool so that institutions can also participate. Coinbase now has over 100 million registered users and 8 million monthly active trading users. According to Coinbases investor report, the value of customer assets on its platform is $328 billion.
Retail transactions only account for about 18% of Coinbases transactions. Starting in 2024, the proportion of Coinbases institutional clients transactions began to increase continuously (the transaction volume in Q1 2024 was US$256 billion, accounting for 82.05% of the total transaction volume). As Coinbase integrates DEX on Base, the breadth of DeFi plus the compliance standards of TradFi should be able to introduce a large amount of liquidity for tens of thousands of Base chain tokens. More importantly, a large number of products in the Base ecosystem will have the possibility of Coinbases compliance channel with the real world.
Bases largest native DEX Aerodrome has also become a hot topic of discussion in recent days. As one of the first transaction routers embedded in the Coinbase main site, it has risen by 80% in the past week and its market value has increased by nearly US$400 million.
The communitys attitude towards this is also divided into two parts. The well-known KOL thecryptoskanda is not optimistic about Coinbases strategy. When discussing Binance Alpha, he believes that Coinbase is imitating Binance Alpha and opening the App to buy assets on the Base chain is just a superficial study. However, KOL deconstructor 0x BeyondLee believes that this is not the same concept as Binance Alpha. Alpha still has an access mechanism, not all coins can be listed, while Coinbases rhetoric is that all Base assets can appear. It is as outrageous as being able to directly trade the equity of the fruit stand downstairs on Tonghuashun. Whether in terms of liquidity or attention, the gains to the Base chain are unprecedented.
Coinbases attack on on-chain liquidity does not stop there. Well-known KOL TheSmartApe the_smart_ape said on social media that because of Coinbases move, he will start selling $Hype that he has held since TGE. He further explained that Hyperliquid currently has about 10,000 to 20,000 active users per day, and the total number of users is about 600,000. Among them, 20,000 to 30,000 core users contributed nearly $1 billion in revenue, a large part of which came from the United States.
But most US traders use Hyperliquid because they have no better options. They are excluded from Binance and other major CEXs and cannot trade perpetual contracts. But when both Coinbase and Robinhood announce that they will launch perpetual futures products in the US, it will be a huge blow to Hyperliquid, and a large part of its large number of core users may turn to Coinbase or Robinhood. Coinbase, which is safer and more convenient to access, does not require self-custody, has no complicated DeFi UX, and has the full support of regulators such as the US Securities and Exchange Commission (SEC), can attract most traders. They don’t care about decentralization. As long as it is safe and easy to use, they will use it.
Byreal, Bybit’s on-chain doppelganger
Bybits actions in the on-chain war are more restrained than those of Binance and OKX. It does not build a chain or rollup by itself. It only advances in three directions: user entry, on-chain transactions and fair issuance.
First, Bybit has been promoting the independence of the Web3 brand since 2023, and launched the Bybit Web3 wallet, which embeds the core functions (Swap, NFT, inscriptions, GameFi) that introduce users to the chain. The wallet integrates DApp browser, airdrop activity page, cross-chain aggregation transactions and other capabilities, and supports EVM chain and Solana at the same time. The goal is to become a lightweight bridge for CeFi users to migrate to the chain world. However, with the fierce competition in the wallet market, the project did not set off a boom.
Bybit turned its attention to on-chain trading and issuance platforms, and launched Byreal, which is deployed on Solana. The core design concept of Byreal is to replicate the matching experience of centralized trading platforms, achieve low slippage transactions through the RFQ (Request for Quote) + CLMM (centralized liquidity market making) hybrid model, and embed mechanisms such as fair issuance (Reset Launch) and revenue vault (Revive Vault). The test network is said to be launched on June 30. The main network will be launched in the third quarter of 2025.
Bybit has also launched Mega Drop on its main site, which has been carried out for four phases. It adopts a model of automatically obtaining the projects token airdrops by staking. The current profit estimate is that staking 5,000 US dollars can get about US$50 in each phase, but it varies depending on the quality of the project.
In general, Bybit’s strategy in the on-chain war is to “use lower development costs and leverage existing public chain infrastructure” to build a bridge connecting CeFi users and DeFi scenarios, and expand its on-chain discovery and distribution capabilities through components such as Byreal.
This round of decentralized derivatives wave triggered by Hyperliquid has actually evolved from a breakthrough in the technical paradigm to a reshaping of the game pattern between trading platforms. The boundaries between CEX and DEX are being broken, centralized platforms are starting to actively go on-chain, and on-chain protocols are constantly simulating the centralized matching experience. From Binance Alphas recovery of primary pricing power, to OKXs construction of Web3 full-stack infrastructure, to Coinbases use of compliance to reach the Base ecosystem, and even Bybit has built its own on-chain doppelganger through Byreal, this on-chain war is far more than a technical competition, but also a battle for user sovereignty and liquidity dominance.
Who will eventually occupy the commanding heights of future on-chain finance depends not only on performance, experience, and model innovation, but also on who can build the strongest capital flow network and the deepest user trust channel. We may be standing at the critical point of the deep integration of CeFi and DeFi, and the winner of the next cycle may not be the most decentralized one, but may be the one who understands on-chain users the most.
Hype! Hype! Hype!
In April 2020, dYdX launched the decentralized perpetual contract trading pair BTC-USDC for the first time, thus opening the road to derivatives on decentralized trading platforms. After five years of development, the emergence of Hyperliquid has unleashed the potential of this field. So far, Hyperliquid has accumulated a trading volume of more than 3 trillion US dollars, and the average daily trading volume has approached 7 billion US dollars.
With the breakthrough of Hyperliquid, decentralized trading platforms have become a force that centralized trading platforms cannot ignore. The trading players whose growth has gradually stagnated have been diverted by decentralized trading platforms led by Hyperliquid. Centralized trading platforms are eager to find the next growth anchor. In addition to expanding the open source strategy of stablecoins or payments, the first thing to do is to take back the throttling strategy of contract players flowing into the chain. From Binance to Coinbase, major centralized trading platforms have begun to integrate their own resources on the chain. At the same time, the attitude of community players towards blockchain has changed from being entangled in decentralization to most people caring more about no permission and fund security. The boundary between decentralized and centralized trading platforms is becoming blurred.
In the past few years, the ideas represented by DEX have been a symbol of resistance to the monopoly of CEX power, but as time goes by, DEX has gradually begun to borrow and even copy the core skills of the former dragons. From trading interface to matching methods, to liquidity design and pricing mechanism, DEX has reshaped itself step by step, learning from CEX and even going further.
Now that DEX has grown to the point where it can complete all the functions of CEX, even if it encounters suppression from CEX, it cannot eliminate the markets enthusiasm for its future development. It is no longer just about decentralization, but about the transformation of the financial model and the changes in the asset issuance model behind it.
CEX also seems to have launched a counterattack. In addition to developing more business channels, it also attempts to bind the liquidity that originally belonged to the chain to its own system to make up for the decreasing trading volume and number of users stolen by DEX.
The market is most creative and dynamic when it is full of diverse competition. Whether it is the competition between DEX or CEX, it is the result of the continuous compromise between the market and reality. This on-chain war around liquidity dominance and user attention has far exceeded the technology itself. It is about how trading platforms reconstruct their roles, capture the needs of a new generation of users, and find a new balance between decentralization and compliance. The boundaries between CEX and DEX are becoming increasingly blurred, and the winners in the future belong to the builders who find the best path between experience, security, and permissionlessness.
