According to forecasts, the volume of derivatives trading on decentralized exchanges (DEXs) is expected to more than double in the current year.
The mentioned expectation is because a tendency has been observed recently, in which the number of investors is increasing, opting for cheaper and more liquid alternatives to centralized platforms.
According to the dYdX Annual Ecosystem Report 2024, the volume of DEX derivatives reached $1.5 trillion last year. It is worth noting that this indicator is a record. The volume of DEX derivatives last year showed an increase of 132% compared to the figure fixed in 2023. In January 2024, perpetual DEX volume was valued at $81 billion. By December, the corresponding figure had grown to $242 billion.
If the mentioned upward dynamic persists, the total DEX volume will reach $3.48 trillion in the current year. This forecast was generated by dYdX.
DEXs have also become the most popular platform for spot trading. Their spot market share has more than doubled in the last year. The corresponding indicator increased from 9% to 20%. It is highly likely that this tendency towards the upward dynamic will continue in the current year.
The increasing volume of DEX is a reflection of the growth of the cryptocurrency market. These platforms also gain users due to low transaction fees and wide access to more speculative assets. For example, DEX trading volume on Solana showed a sharp increase against the background of the memecoin frenzy. In the current month, trading volume on Solana-based DEXs exceeded similar combined indicators demonstrated by Ethereum and Base.
Despite the beginning of the activities of the administration of the President of the United States, Donald Trump, which has a kind of friendly status towards the cryptocurrency industry, some reporting requirements regarding centralized exchanges in the US may force more traders to opt for DEXs. Starting in the current year, the United States Internal Revenue Service will require the mentioned exchanges and other brokers to report transactions involving digital assets. The relevant reporting rules will be extended to DEXs in 2027.
The US Internal Revenue Service stated that the specified rule should help investors file accurate tax returns on their cryptocurrency. At the same time, some industry representatives characterize this rule as excessive.
Government blockchain expert Anndy Lian stated the real risk of pushing users to switch to decentralized platforms such as Uniswap and PancakeSwap. It was also noted that while decentralized systems generate challenges for tax enforcement, advancements in the area of blockchain analytics and potential regulatory developments by 2027 could transform this landscape.
The US Internal Revenue Service’s reporting rules have faced serious opposition from the crypto industry. Last month, the Blockchain Association sued the tax agency. In this lawsuit, it was noted that the mentioned agency exceeded its statutory authority and violated the Administrative Procedure Act.
As we have reported earlier, Binance CEO Says Bitcoin to Hit New All-Time High in 2025.
