Centralized exchanges (CEXs) play a vital role in bridging traditional finance with decentralized cryptocurrencies. While the ultimate goal of the cryptocurrency industry is decentralization, CEXs are indispensable in achieving a sustainable, inclusive, decentralized future.
The zero-sum nature of the derivatives market creates a highly competitive and speculative environment, which distracts from the establishment of a robust, reliable framework for value exchange. However, CEXs provide liquidity, foster market depth, reduce price volatility, and enable fair price discovery, ultimately contributing to the stability and growth of the crypto market. They also serve as a significant entry point for newcomers to the crypto space by providing user-friendly interfaces and intuitive trading tools. CEXs efficient risk management measures, around-the-clock support services, and convenient fiat on-ramps are other factors that contribute to the need for them. Striking a balance between decentralization and the need for centralized exchanges becomes crucial for achieving a sustainable, inclusive, decentralized future.