Decentralized Exchanges’ Market Share Hits All-time High

Decentralized exchanges (DEXs) are processing more trades than ever, with the DEX-to-CEX spot trading ratio at an all-time high of 14.22%, according to The Block, and reaching as high as 22% in the last 24 hours, according to DeFiLlama.

The increase in DEX dominance indicates a growing number of users buying and selling tokens on-chain and could be attributed to the rising popularity of memecoins, which typically do not trade on centralized exchanges until they achieve a relatively large market capitalization.

At 14.22%, the DEX-to-CEX volume ratio beats out its previous high from May 2023 at 13.7% and January 2022's local top of 11.3%.

May 2023 is often looked back on as the first “memecoin season” of this market cycle as a result of PEPE’s breathtaking rally, and January 2022 coincided with the NFT market’s peak daily volumes. Notably, both of these “metas” required users to transact exclusively on-chain.

In addition to the DEX-to-CEX ratio, Solana’s dominance is also at new highs. For the first time ever, Solana is set to outpace Ethereum in terms of monthly DEX volumes.

As of July 29, Solana DEXs have processed $52.3 billion in total volume for the month, whereas Ethereum DEXs have processed $49.1 billion in the same time period, according to DeFiLlama.

SOL has greatly outperformed ETH amid Solana’s catching up to Ethereum in terms of on-chain metrics. The SOL/ETH ratio is up 329% over the last year and 28% in the last 30 days.