The decentralized exchange (DEX) landscape has quietly gained ground against centralized exchanges (CEXs) over the past few years.
But in May and early June 2025, this slow burn turned into a sudden surge. According to recent on-chain data, the DEX-to-CEX volume ratio spiked significantly in May and even briefly exceeded 140% for a single day in early June—an unusually high level that has raised both excitement and questions within the crypto community.
The increasing prominence of DEXs has been taken as an indicator of the growing prevalence of decentralized exchanges. Yet this much-touted shift toward decentralized trading has not been as organic or healthy as it seems. Rather, it has been driven by a dangerous surge in DEX trading on the BNB Chain.
1/ DEX to CEX volumes have slowly risen over the past few years, but the ratio recently spiked in May. pic.twitter.com/louZCVpWEN
— Blockworks Research (@blockworksres) June 10, 2025
Binance Alpha Campaign Fuels Unnatural Volume Surge
The main reason for the recent DEX volume explosion is Binance’s heavily incentivized “Alpha DEX Campaign” on BNB Chain. Meant to enhance liquidity and user engagement in chosen decentralized protocols, the campaign resulted in a tremendous surge of trading across several DEXs operating on the chain.
Incentives often attract sincere users, but they also tend to attract exploitative behaviors—most notably, wash trading. In this instance, wash trading became a principal method for achieving the campaign’s aims. Traders, operating at high frequency and engaging in minimal-risk trades, went to and fro to farm rewards and raise transaction volume in a totally artificial manner. In this instance—quite literally—a huge waste of math.
Polyhedra and KOGE were at the heart of this activity, with each generating a not insignificant several billion dollars in daily volume at the peak of the campaign. Now, analysts are looking at the tokens’ on-chain activity and saying it doesn’t look right—specifically, that it looks too much like a campaign in which the main tokens rather than the campaign itself are the objects of buyer interest.
The volume from wash trading on BNB Chain pushed the overall decentralized exchange (DEX) numbers much higher, significantly affecting the ratio of DEX to centralized exchange (CEX) volume.
CEX Volumes Decline as DEX Take Temporary Spotlight
Although decentralized exchange volume has received a short-term boost, centralized exchanges have continued to see a downward trend in their trading activity. Since December 2024, spot trading volumes on these types of exchanges have steadily fallen. By May 2025, the total monthly volume across all centralized exchanges came in at just over $1 trillion. This total fell significantly below the monthly volumes registered at the centralized exchanges during the previous bull cycle of 2023.
This continuous decline is an outcome of macro market dynamics. Regulatory oversight and compliance have never been at such a level in this space, and these measured activities have led to—how do I put this diplomatically?—a not-so-favorable atmosphere for platforms that are not on-chain. And, quite frankly, the aura of these outfits has never been so tarnished, either.
Equally important, it seems retail traders are on the road to abandoning centralized exchanges.
Yet, that is not to say DEXs are usurping CEXs. DEXs can allure certain subsets of users for a variety of reasons. But they seem to be growing on the back of incentives, not meaningful or fundamental demand.
A Distorted Ratio or a Glimpse of the Future?
The brief moment when the ratio of DEX-to-CEX volume reached 140% in June was attention-grabbing but perhaps misleading. Since a large part of the spike in volume was due to wash trading on a single chain, the episode should be viewed with some caution. Still, it does raise an important question: What happens when DEX incentives and technical performance reach a point at which growth in volume becomes organic?
Though this episode has exposed the easily gamed nature of volume metrics, it also shows the increasing infrastructure capacity of DEX platforms to handle large transaction volumes. Even if growth is artificially inflated by bad trading practices, it is still growth.
In past bull runs, we have seen surging transaction volumes with coinciding network congestion and failure on some of the largest public blockchains.
Market players and analysts will probably distinguish more between quality and quantity for trading volume in the future. Incentivized campaigns may drive short-term engagement, but real user adoption, improved user interfaces, and better protection against manipulative trading behavior will be what drives sustainable growth.
Currently, the recent spike in the DEX-to-CEX volume ratio not only gives us a view of what might be achievable but also serves as a timely reminder of the still-encumbered path toward decentralized finance’s competitive establishment vis-à-vis the long-standing dominance of centralized platforms.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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