Centralized crypto exchanges are increasingly incorporating DeFi features into their platforms, a shift that Animoca Brands research suggests could be leading them toward becoming so-called “universal exchanges” or UEXs.
In a report shared with The Defiant, the analysts stated that UEXs could gain popularity among a wider audience because they offer more than just trading, including on-chain tokens and tokenized real-world assets.
Source: Animoca Brands
While centralized exchanges (CEXs) have been central to crypto’s growth for years, the growth among crypto-native users is slowing, analysts note, adding that new tools, such as memecoin launchpad Pumpfun and decentralized exchanges (DEXs), are pulling users away.
To stay relevant, big exchanges are now increasingly adding wallets, on-chain trading, and DeFi features, the analysts added.
In commentary for The Defiant, Scott Shapiro, head of trading at cryptocurrency exchange Coinbase, explained that bringing DeFi into the centralized finance space is the “right path forward in creating a more universal experience,” adding that these updates unlock access to “new asset classes and millions of onchain assets while maintaining a familiar, approachable experience for traders.”
“This idea is reflected in our broader goal of becoming the ‘everything exchange’ – empowering traders to explore new opportunities, whether that’s through DEX trading and perpetual futures, or through prediction markets and tokenized equities,” Shapiro told The Defiant.
Upcoming Revolution
Animoca’s research notes that CEXs are also integrating DEX tokens. Platforms like Binance Alpha and Bitget Onchain let users trade tokens that were previously only available on decentralized platforms. The Defiant reached out to Binance but didn’t hear back by press time.
Gracy Chen, CEO of Bitget, told The Defiant that the next generation of financial products “will be apps that challenge banks and traditional financial institutions,” noting that platforms will integrate the security of CEXs, with the access to tokens offered by DEXs, along with TradFi’s tokenized stocks and bonds.
Animoca says the UEX trend is tied to policy changes as the new pro-crypto regulations in the U.S. are making it easier for exchanges to put real-world assets on-chain, which opens up opportunities for traditional investors to try crypto without navigating complex on-chain mechanics.
Addressing whether integrating DeFi into CeFi creates regulatory challenges, Chen explained that many products and services “still have a gray area.”
She added that, as of now, “custodial and non-custodial products are separated,” but hybrid models, such as UEXs, will “gradually push regulators to refine their stance and build frameworks that recognize the benefits of decentralization while still protecting users.”
