Decentralization trading platform ( DEX ) development trend analysis

Since its rapid development began in June 2020, DEX has seen a monthly trading volume increase by 105 times within a year, reaching $203.95 billion. Currently, the DEX market is exhibiting the following five major trends:

1. Market share is highly concentrated. From the perspective of locked assets and trading volume, a few leading DEXs occupy the vast majority of market share.

2. The proportion of cross-chain and cross-layer trading protocols has increased, accounting for about 1/4 of the leading DEXs. This reflects the mainstream trend in the development of DeFi.

3. AMM+NFT has become a new trend. One type is NFT trading platforms based on the AMM mechanism, and the other type adds NFT trading functions to AMM.

4. Major public chains have all entered the top ranks of DEXs, and the development momentum of DEXs on new public chains is rapid. The Ethereum chain still dominates, but other public chains are also competing for market share.

5. Stablecoin trading platforms and derivative trading platforms have significant growth potential. In the current market environment, user demand for these two types of products is increasing.

In this context, five DEX directions worth noting include: established Ethereum chain DEX, cross-chain DEX, stablecoin trading protocols, Cosmos ecosystem DEX, and new public chain DEX.

In the long run, DEX remains an important pillar and entry point for users in DeFi. The landscape of public chains shows a situation of one dominant chain and multiple strong contenders, with Ethereum leading the way, while other chains compete for market share by expanding their ecosystems and user bases. Additionally, the development of DEXs on L2 networks is also worth noting, as the advantages of low slippage and low gas fees can enhance user experience.