What Happened on June. 6th | Crypto Market will not collapse because Centralized Exchanges sued by SEC
Binance is an good company, but in a decentralized industry, it is concerning that one company controls nearly 50% of the industry's trading volume, which represents a high level of market concentration, far exceeding many traditional industries. By definition, if the top 5 companies in a market account for 60% of the market size, the industry can be considered an oligopoly.
According to Tokeninsight data, centralized exchanges account for 98% of the total trading volume in the cryptocurrency market, while decentralized exchanges make up less than 2%.
Before the rise of DeFi in 2020, there were no reliable decentralized exchanges, and centralized exchanges were the only choice. However, now we have spot exchanges like Uniswap and Curve, which have undergone multiple stress tests during extreme market conditions. There are also derivative exchanges like dydx and GMX. The development of Ethereum Layer 2 has gradually reduced on-chain transaction costs.
The emerging account abstraction technology will significantly improve user experience, allowing people to use decentralized wallets through familiar methods such as logging in with an email or account password.
Centralized exchanges will still play a crucial role, but these technological advancements represent the true future of the crypto market.
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