DEXs average trade size 10x more than CEXs: Kaiko report
While DEXs were invented to remove intermediaries while facilitating transactions, it has largely benefitted large traders or whales.
As per a recent report by French digital asset data provider Kaiko, DEXs or Decentralized exchanges have seen a rapid increase in their average transaction value, ranging from an average transaction size of $10,000 to $20,000, more than 10 times compared to CEXs’ $2,000 to $4,000.
On the other hand, while an average CEX processes millions of transactions in a day, major DEXs barely process 50,000 trades per day, suggesting that “the profile of the average trader now skews more whale.”
“The large trades are likely due to Ethereum’s high transaction fees, which prevents more retail traders from using DEXs,” Kaiko noted. The report suggested that a transaction fee can easily surpass $100 due to scalability issues and high congestion on the Ethereum chain.
Kaiko noted that while DEXs are still quite far from the dominance of CEXs, they have the potential to shift the whole market dynamic. It noted:
“An increasing number of DEXs are being built on Layer 2 protocols and alternate Layer 1 protocols such as Binance Smart Chain and Avalanche, which could make using DEXs less expensive and more attractive to smaller traders.”
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