Decentralized exchanges (DEXs) have grown in significance and maturity over the last year. After a period of crypto winter in 2020, FTX bankruptcy highlighted the real value of DEXs for providing a decentralized platform for traders to transact funds without any intermediaries or custodians. Today, the DEX ecosystem is booming with the eighth largest DEX, Chronos, reaching a total value locked (TVL) of $217 million just seven days after its launch on the Arbitrum blockchain.

For DEXs to reach the levels of liquidity seen in traditional exchanges, the underlying blockchains need to scale, allowing for lower gas prices and increased throughput. According to CTO of Maverick Protocol Bob Baxley, the past year has served as a proof of concept for DEXs and DeFi, with some DEXs even recording higher trading volumes than Coinbase on certain days.

Charles Wayn, co-founder of the Web3 community platform Galxe, emphasizes the importance of decentralization for DEXs, and that these platforms will become the backbone of gaming adoption in the near future. Meanwhile, Brent Xu, co-founder of the Web3 bond-market platform Umee, expects volumes for different DEXs to grow at an exponential rate.

However, users should remain aware of the risks of trading on DEXs, including the possibility of hacks and bugs. It is in part due to these issues that regulation has been lax in the crypto space. In the United States, the Securities and Exchange Commission (SEC) is currently headed by Gary Gensler, who has the final say on regulation. As more people become interested in investing in cryptocurrencies, Gensler's authority and influence over the industry could become more significant.



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