Written by: cryptoslate

Translated by: Blockchain Knight

In the third quarter of 2025, the spot trading volume on decentralized exchanges (DEX) reached $1.43 trillion, marking the strongest quarterly performance in history and indicating a structural shift in the pricing mechanism of the cryptocurrency market.

This data represents a 43.6% increase from the $1 trillion in the second quarter and surpasses the nearly $1.2 trillion historical record set in the first quarter of 2025.

August and September ranked as the second and third highest trading volumes in history, with $510.5 billion and $499.1 billion, respectively, only behind January 2025's $560.3 billion.

According to data from The Block, DEX trading volume accounted for 17.7% of the total spot volume on centralized exchanges, an increase of 0.1 percentage points from the second quarter and the previous historical high.

This milestone indicates that decentralized platforms can now compete with centralized exchanges during active trading periods, reflecting improvements in infrastructure maturity and liquidity depth.

The surge in trading volume is accompanied by fundamental changes in market mechanisms. Analyst Ignas pointed out that recently launched cryptocurrencies on Binance have generally underperformed compared to the broader market, indicating that the price discovery process has shifted to decentralized exchanges, while centralized platforms are gradually becoming exit liquidity channels.

After the launch of Simon's Cat (CAT) and Magic Eden's ME, both saw declines of 70%, and Velodrome (VELO) plummeted nearly 70% to $0.1154 after its listing on Binance, confirming the trend of centralized exchanges increasingly becoming tools for exit liquidity rather than pricing venues.

Ignas summarized: "Previously, price discovery occurred in the VC private placement market, with CEX acting as an exit channel; now DEX takes on the price discovery function, while CEX focuses on exit liquidity."

This shift is led by professional traders known as "smart money" on decentralized platforms.

Platforms like Uniswap have consistently achieved monthly trading volumes exceeding $100 billion, indicating that more price formation occurs through AMM curves and RFQ auction mechanisms rather than custodial order books.

Despite Ignas's observations earlier this year, decentralized trading venues continue to attract investor usage. This growth is reshaping market operational mechanisms, altering the ownership of pricing power, risk-bearing, and liquidity orientation.

As DEX continues to achieve monthly trading volumes exceeding $100 billion, index construction, market-making models, and oracle designs will tilt towards DEX liquidity sources, ultimately forming a transparent programmable market that integrates custody and execution in one wallet.

Liquidity, pricing, and risk management are migrating towards smart contracts and solver networks, with regulators, index creators, and market makers viewing on-chain venues as core information sources rather than supplementary channels.

Maintaining exit liquidity channels through centralized exchanges remains crucial for the healthy development of the market, providing an outlet for position liquidation and capital rotation.

This dual-layer structure allows price formation to occur on decentralized tracks while reserving deep exit channels for large-scale immediate liquidity seekers.

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