Stagnant thoughts, the dilemma of centralized exchanges in the "Web3" era

Author: Odaily Planet Daily

On January 9, 2025, the trading volume of DEXs historically reached 20% of that of CEXs for the first time, and the seemingly calm surface of the cryptocurrency industry began to stir with undercurrents.

History always repeats itself. From the "Occupy Wall Street" movement to the birth of Bitcoin aimed at financial oligarchs, every era has its own revolutionaries. They shatter the shackles and reconstruct order, yet often fall into the same traps after victory. Once, cryptocurrencies held high the banner of resisting centralization, but now they are replicating the same concentration of power: 80% of assets are once again concentrated in the hands of 20% of people. CEXs, born in an environment of fairness, transparency, and openness, seem to have become even more centralized than Wall Street banks.

This is the charm of history: as old forces decay, new wielders of the sword will inevitably emerge. Humanity's desire for fairness, transparency, and freedom has never changed.

A Brief Discussion on the Current State of the "Crypto Utopia" at the Crossroads

CEXs, once proud rulers of the market, are now embroiled in an unavoidable market controversy. The wealth effect has faded, and they have become a diversion pool for new tokens, embroiled in a series of scandals like "the new refuge for flippers." Even Binance has been caught in multiple disputes regarding token listings and Meme discussions.

In the past, exchanges survived on inflated market shares and false trading volumes, but all of this has vanished in the flowing river of time. When DEXs first broke through 20% of CEX trading volume, the market resembled a shattered glass ball, with fragments scattered, revealing the hidden cracks within.

• Pump.fun realizes the wish for low-cost token issuance for everyone in a new way;
• Polymarket reveals the secrets of the crypto "black box" with on-chain predictive real data;
• Hyperliquid, with lower fees than CEXs and more attractive incentive mechanisms, has become the best marketing campaign alongside the rapid rise in token issuance and $HYPE prices;

As the old gives way to the new, the market always sweeps through with the latest narratives and innovative products, which is an inevitable response. It is akin to building a casino on Mars; the old order has faced unprecedented shocks, while the spirit of crypto is innovatively passed down in better ways. Liberals, yearning for freedom in their crypto world, and crypto enthusiasts prefer permissionless value networks.

Breakthrough or Transformation? The Layout Battle of Various Exchanges

Change has quietly arrived, and some CEXs with keen senses have begun to act.

First is Binance, the leading CEX, which, as the top exchange, is bound by traditional financial asset management methods, frequently listing low liquidity, high FDV VC tokens, leading to a crisis of trust. However, this has also been accompanied by a shift in market attention; starting in the second half of 2024, Binance has significantly increased the frequency of listing Meme tokens and has used the Alpha section of the Binance web3 wallet as a "testing ground," successively launching innovative tokens like AIXBT, CGPT, and Cookie.

Secondly, OKX, focusing on developing compliant businesses in 2024 and continuously consolidating its web3 wallet business, has taken a more conventional approach. Coinbase, one of the exchanges most affected by U.S. policies and responding quickly, has gradually expanded into more markets with a high frequency of token listings.

Among other exchanges, LBank, which was among the first to sense the winds of change, began laying out the Meme track as early as 2023, launching a $10 million meme special fund, and in 2024, it made significant efforts in the Meme sector, launching popular tokens like Moodeng, Goat, ACT, and Slerf, all achieving over 50 times growth, being bolder and better at leveraging information and timing compared to Gate and Bitget.

During this period, there has been a selection of the performance of the Meme market in 2024, including the top ten memecoins, analyzing market capitalization, market share, and meme performance in different ecosystems, as well as the performance of new infrastructures and the transformation of CEXs regarding memes, all reflecting a deep research and rigorous attitude towards memes.

Crypto Revelation: From Bubble to Real Awakening

With the brand upgrade of LBank at the beginning of 2025, it seems that LBank is not content with the status quo.

Recalling LBank's former CEO Eric He in 2024's Space, he repeatedly stated:

• "So-called value investment is actually a regression of the industry; high valuations, to some extent, represent arrogance and prejudice."
• "Openness, transparency, and fairness will be the ultimate destination for CEXs."
• "If CEXs continue to cling to decaying traditions and refuse self-reform, the crypto market will inevitably welcome the dawn of decentralization, and the era of DEXs is unstoppable."
• "Returning to the original intention, allowing more users to experience the wealth effect and achieve barbaric growth in the bubble."

In his view, Memecoins break traditional investment barriers, providing equal opportunities for all participants. Although this is a high-risk track, as he said: "This could nurture the next BTC or DOGE." Coupled with LBank's recent brand upgrade, it inevitably raises questions about whether LBank will also follow the trend of web3 wallets and engage in differentiated competition on the product front.

Although many CEXs are already exploring the path of Web3, such as launching services closely integrated with wallet functions, attempting to secure a place in the trend of decentralization. However, this "exchange + wallet" model, while seemingly innovative, fundamentally aims to direct CEX users into their own ecosystem rather than genuinely pursuing decentralization. For LBank, although the brand upgrade may suggest a focus on the Web3 ecosystem, based on its historical behavior, it is unlikely to simply follow the trend to "walletize."

What Kind of CEX+DEX Do We Need?

The discussion about CEXs and DEXs has never ceased; the essential differences between the two remain one of the core controversies in the crypto market. CEXs have dominated the past crypto market, establishing their supremacy through efficient trading systems, strong liquidity, and highly concentrated resources. However, as the concept of decentralization gradually takes root, DEXs have risen to become strong competitors to CEXs. The greatest advantage of DEXs is their decentralized nature, offering more transparency in trading, greater user control, and minimal external influence on trading information and asset flow.

Perhaps in the future crypto market, CEXs and DEXs will no longer be opposing poles but rather a deeply integrated ecosystem. True innovation will be the injection of decentralized elements into the efficient trading and liquidity advantages of CEXs, forming a hybrid trading model of "CEX+DEX." This model can maintain CEXs' advantages in speed, liquidity, and resource concentration while leveraging the transparency and user control of DEXs to ensure fairness and autonomy on the platform.

This does not mean that CEXs should abandon their traditional operating models; rather, through gradual reform, they should integrate decentralized technologies and governance into their existing structures. Specifically, CEX platforms can introduce decentralized trading pools, smart contracts, and community governance to break through the limitations of traditional models, ensuring trading efficiency while providing users with greater control and transparency.

The true winners will be those platforms that can deeply integrate the concept of decentralization with efficient trading technology. LBank's strategic layout is precisely a key step in this process, striving to find a more innovative path that meets market demands through innovative thinking and technological integration between CEXs and DEXs.

Be a Change Maker or Be Changed?

History has proven that in every major transformation, the guardians of the status quo are often abandoned by the times. Every market participant faces a choice: to remain in the old comfort zone or to bravely embrace the new paradigm? To cling to existing interests or to actively break through barriers? The true winners will be those pioneers who dare to break shackles and embrace the challenges of the new era.

For the "ever-victorious general" in the crypto market, CEXs are often filled with controversy and security considerations. In today's emerging token distribution models on-chain, which have long departed from the cruel reality of traditional institutional investment and CEX token listings, crypto history has shifted from an infrastructure-dominated cycle to a new cycle centered on applications. The intertwining of truth and lies poses a significant test: whether to continue to be complacent or to achieve transformation during this turning point.

The evolution of the market is not static; the true winners will be those pioneers who dare to break conventions and seize new opportunities. In this era of transformation, transparency, decentralization, and innovation are the core values of the crypto market. Whether it is LBank or other CEX platforms, only by continuously examining their core values and breaking inherent frameworks can they stand out in the future crypto market.

The horn of change has sounded, and the old order is collapsing. In this era full of opportunities and challenges, whether to become a promoter of change or to passively accept change, the final answer will be written by history.