Centralized exchanges are experiencing a collective directional adjustment. From Coinbase spending nearly $2.9 billion to acquire the derivatives trading platform Deribit and collaborating with Shopify to promote USDC adoption among physical merchants, to Binance launching the Alpha program to reshape primary market pricing mechanisms, and Kraken acquiring NinjaTrader to expand the options market and partnering with Backed to develop "US stock" business. Bybit has also opened trading for gold, stocks, forex, and even crude oil indices on its main platform.
Top trading platforms are actively expanding their revenue sources, attempting to achieve multi-dimensional business "replenishment" from off-chain to on-chain, from retail to institutional, and from mainstream coins to Altcoins. Simultaneously, these platforms are extending their reach into the on-chain ecosystem. Taking Coinbase as an example, its main site has integrated DEX routing on the Base chain, intending to break down the liquidity barriers between CeFi and DeFi and reclaim trading shares lost to on-chain protocols like Hyperliquid.
However, behind these moves is the continuous pressure on the actual revenue capabilities of trading platforms, with crypto exchanges facing unprecedented development bottlenecks. Coinbase's latest financial report shows that its trading fee revenue has been halved from $4.7 billion in 2024 to $1.3 billion in Q1 2025, a quarter-on-quarter decline of 19%. The trading volume of BTC and ETH has dropped from 55% in 2023 to 36%, with revenue structure increasingly dependent on the more volatile Altcoin sector. Meanwhile, operating costs have not decreased, reaching $1.3 billion in the first quarter of 2025, almost equal to its revenue. Binance also faces challenges of declining trading fees, with the average trading fee revenue hitting a three-year low from the end of 2024 to now, despite maintaining market leadership.
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Binance's trading volume has been mostly sluggish in the past year, source: coingecko
With compressed trading fee space, continuous off-chain liquidity diversion, and traditional brokers reshaping compliant entry, these intertwined forces are forcing CEX to transform into "on-chain platforms". Famous KOL ASH analyzed on X that as more DEXs improve their trading mechanisms, creating products almost comparable to CEX in user experience but with more transparent trading processes, CEXs are finally noticing this and shifting their strategic focus to permissionless modes, with many CEXs initiating a market battle for "on-chain CEX".
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OKX Focusing on Infrastructure Development
[The rest of the translation follows the same professional and accurate approach]Trade any chain tokens through Base's native routing and wrap them into KYC-verified liquidity pools, enabling institutional participation. Coinbase now has over 100 million registered users, with 8 million monthly active trading users, and according to Coinbase's investor report, the customer asset value on its platform is $328 billion.
Retail trading accounts for only about 18% of Coinbase, and from 2024, the trading volume of Coinbase's institutional clients has been continuously increasing (Q1 2024 trading volume was $256 billion, accounting for 82.05% of total trading volume). With Coinbase integrating DEX on Base, the breadth of DeFi combined with TradFi's compliance standards should be able to introduce massive liquidity for thousands of Base chain tokens, and more importantly, many Base ecosystem products will have the possibility of a compliant pathway through Coinbase.
Base's largest native DEX, Aerodrome, has also become a hot topic these days. As one of the first embedded trading routes on Coinbase's main site, it has risen by 80% in the past week, with its market value increasing by nearly $400 million.
The community's attitude is divided into two parts. Famous KOL thecryptoskanda is not optimistic about Coinbase's strategy, believing that Coinbase is merely mimicking Binance Alpha by allowing App purchases of Base chain assets. However, KOL decoder 0x BeyondLee argues that this is not the same concept as Binance Alpha, stating "Alpha has access restrictions and not just any token can be listed. Coinbase's approach allows all Base assets to appear, which is as absurd as trading the equity of a fruit stall downstairs directly on Tonghuashun. This is unprecedented in terms of liquidity and attention for the Base chain."
Famous KOL TheSmartApe "the_smart_ape" stated on social media that due to Coinbase's actions, he will start selling $Hype, which he has held since TGE. He further explained that Hyperliquid currently has about 10,000 to 20,000 daily active users, with a total user base of around 600,000. Among them, 20,000 to 30,000 core users contribute nearly $1 billion in revenue, with a significant portion coming from the United States.
Most American traders use Hyperliquid because they have no better options. They are excluded from Binance and other major CEXs, unable to trade perpetual contracts. However, when Coinbase and Robinhood announce launching perpetual futures products in the US, this will be a massive blow to Hyperliquid, with a large portion of its core users potentially shifting to Coinbase or Robinhood. Coinbase, which is safer, more convenient, requires no self-custody, has no complex DeFi UX, and is fully supported by regulatory bodies like the SEC, can attract most traders who don't care about decentralization as long as it's safe and user-friendly.
[The rest of the translation follows the same professional and accurate approach]CEX seems to have launched a counterattack, developing more business channels and attempting to bind the liquidity originally on the chain with its own system to compensate for the increasingly diminishing trading volume and user numbers "stolen" by DEX.
When the market is filled with diverse competition, it is most creative and vibrant. Whether it is the competition between DEX or CEX, it is the result of continuous compromise between the market and "reality". This "on-chain war" centered around liquidity dominance and user attention has far exceeded the technology itself. It concerns how trading platforms reconstruct their roles, capture the needs of the new generation of users, and find a new balance between decentralization and compliance. The boundaries between CEX and DEX are becoming increasingly blurred, and the future winners will belong to builders who find the optimal path among "experience, security, and permissionless".
