CZ: It is expected that CEX and DEX will coexist long-term, with the current global cryptocurrency adoption depth at less than 1%.

On February 12th, CEX founder CZ stated during an AMA: I believe that CEX and DEX will coexist long-term, for a very long time. At least from what I see now, they serve two completely different user groups. DEX operates directly from wallets, and “protecting your own wallet” remains a specialized skill today. Most people cannot securely manage their own wallets. If you want to actively trade on a DEX, you need a highly secure computer. This means you can’t casually download files from the internet, open images sent by friends, and you have to impose many restrictions to keep your computer truly “clean” and ensure it never gets infected. If your wallet is on your computer and your computer gets infected, your situation becomes very bad. So, these users are completely different from CEX users. CEX only requires an email, password, and customer support. Additionally, the adoption rate of cryptocurrencies is still quite low. In terms of user numbers, I think it’s probably in the single digits; roughly 8% to 10% of people worldwide might hold some form of cryptocurrency. But when looking at wealth share, these people’s crypto assets might account for less than 10% of their total assets. This means that globally, the actual “adoption depth” of crypto might be less than 1%. So, for most users—whom we call regular users, not technical experts—when they first want to get involved with cryptocurrencies, they will go to centralized exchanges, that is, use CEX. As they become more experienced, they might migrate to DEX. But currently, in the crypto world, many early adopters are technical enthusiasts—what I call tech geeks. These people are more likely to transition to DEX. For other mainstream users, migrating to DEX is actually very difficult. However, tools will improve over time. I don’t believe there is truly “competition” between CEX and DEX at the moment. Even if there is competition, there are thousands of CEXs and thousands of DEXs, and the market is large enough to accommodate many players.