Written by: Golem (@web 3_golem)
The epic drop on "10.11" has come to an end, and the market is gradually recovering, but the record high liquidation of $19.3 billion created by this crash still casts a shadow over the market. Many investors believe that the outspoken Trump should take the blame, while others point fingers at Binance, insisting that the decoupling of USDE, BNSOL, and WBETH prices is the main reason for the further market decline.
Binance officially explained the decoupling issue as a temporary technical failure of some platform modules due to the overall market setback. As for the extreme low prices seen in certain spot trading pairs, they were mainly caused by historical limit orders being triggered under one-sided liquidity and issues with UI display accuracy.
Binance has taken responsibility for the platform and compensated users for liquidation losses caused by the decoupling of USDE, BNSOL, and WBETH, with a total amount reaching $283 million. Nevertheless, some investors remain unconvinced, arguing that Binance should also be held accountable for the collapse of altcoins and reiterating issues such as "market manipulation," "data black box," and "deliberate disconnection" associated with centralized exchanges.
On October 13, Hyperliquid co-founder Jeff.hl also engaged in a public spat with Binance founder CZ on social media. Jeff.hl first posted that all orders, trades, and settlements on Hyperliquid are executed on-chain, providing transparency and verifiability, while some centralized exchanges (CEX) have serious underreporting issues in their settlement data, specifically naming Binance.
In response, Binance founder CZ quickly replied to all the criticisms, stating, "While others choose to ignore, hide, shirk responsibility, or attack competitors, key participants in the BSC ecosystem (including Binance, Venus, etc.) have spent hundreds of millions of dollars out of their own pockets to protect users," and he believes this reflects a different value system.
The market is filled with diverse opinions, and no single solution can satisfy all participants. During this sensitive period, Jeff.hl's public questioning of Binance essentially reflects the different trade-offs made between CEX and DEX regarding "relative fairness" and "absolute transparency."
Performance is No Longer the Main Difference Between DEX and CEX
In the past, although DEX was considered the ultimate form of cryptocurrency exchanges, the market share was still dominated by CEX, mainly due to the significant performance gap between DEX and CEX. Issues such as high latency, shallow market depth, low capital efficiency, and poor trade execution accuracy have always affected traders' experiences on DEX. Therefore, even though CEX has been criticized for centralization risks and has faced failures (like the FTX incident), traders ultimately prefer to trade on CEX due to its low latency and high usability.
However, by 2025, these performance issues are no longer the main obstacles hindering DEX from expanding its market. Taking Hyperliquid, which emphasizes CEX-level performance, as an example, it adopts an on-chain Central Limit Order Book (CLOB) model, achieving a qualitative leap in performance compared to traditional AMM DEX, with an average trade confirmation time of just 0.07 seconds, comparable to CEX. While some "niche tokens" on Hyperliquid still face issues of insufficient liquidity and high slippage, for mainstream tokens like BTC and ETH, Hyperliquid's trading slippage has dropped below 0.1%, rivaling that of CEX.
As the performance gap gradually narrows, there is indeed a trend of capital and traders migrating to DEX from 2025 onwards.
According to data from The Block, in the spot market, DEX's market share has shown an overall growth trend compared to CEX, reaching 19% in the third quarter of 2025.
In the perpetual contract market, DEX's market share has grown even more rapidly, from just 4.9% of CEX's contract market at the end of 2024 to 14.33% by October 2025.
In extreme market conditions, today's DEX has also withstood the test. After the "10.11" crash, Hyperliquid officially stated, "Despite the platform traffic and trading volume hitting historical highs during extreme market conditions, the Hyperliquid blockchain did not experience any downtime or delays."
On the same day, however, Binance, the world's largest exchange, faced partial system failures due to technical issues. This does not necessarily indicate that Hyperliquid's performance is superior to Binance's, as the system pressures faced by both are not the same. On October 11, Hyperliquid's perpetual contract trading volume exceeded $10 billion, while Binance's trading volume was more than ten times that. Data from The Block shows that in September, Hyperliquid's contract trading volume was $28.247 billion, while Binance's was $2.34 trillion, meaning Hyperliquid's contract trading volume was only 12% of Binance's.
The Market Only Ever Has "Relative Fairness"
When performance is no longer the main difference between CEX and DEX, will all investors actively choose DEX? After the "10.11" crash, although Binance faced criticism from some quarters, trader Vida, born in the 2000s, still publicly stated that large funds should use Binance, reasoning that Binance will always be responsible for its users at any time.
Some investors have complained that Vida's statement stems from his being favored by Binance. In extreme market conditions, exchanges tend to compensate and soothe the emotions of large holders and "Binance users," while neglecting retail investors and other market participants affected by the situation. Binance's growth is built on the silent "corpses" of many, with the wealthy being fully reimbursed while the common people receive a fraction.
However, aside from the "conspiracy theory" aspects regarding CEX, fairness in this market is always relative. Even DEX, which champions decentralization and fairness, can "waver" in the face of a crisis of interest. On March 26 of this year, Hyperliquid faced its biggest crisis since its inception when a whale manipulated the price of the meme coin JELLY, causing HLP to take on large short positions and face a risk of going to zero of $240 million. Hyperliquid chose to "pull the plug" and delisted the JELLY contract, allowing HLP, which was about to incur losses, to instead profit $700,000.
Hyperliquid's actions sparked a public outcry, making decentralization and fairness seem like a joke. This was not the first time traders exploited vulnerabilities in Hyperliquid for profit; there were also incidents like "whales actively causing liquidations leading to HLP losing $4 million" and "XPL cascading liquidations harvesting $46 million," but Hyperliquid did not compensate users who suffered losses in these events.
This made investors realize that Hyperliquid does not adhere to decentralization and fairness; rather, it chose to "do nothing" before the crisis spread to itself. It can be said that every upgrade and improvement of Hyperliquid is also built on countless "corpses."
The Market Needs "Absolute Transparency"
The trading market has never had true fairness. Frankly speaking, if one party profits, another must incur losses; whether it is DEX or CEX, it is impossible for them to be responsible for everyone. But even if fairness is relative, transparency can be absolute.
In extreme market conditions, CEX always falls into conspiracy theories, primarily because CEX is inherently a "black box" that can be manipulated. Even with upgraded regulatory and compliance measures, the public's distrust of CEX persists due to a lack of transparency. Investors' understanding of the so-called truth comes entirely from exchange announcements, which, while authoritative, can easily be questioned. For example, Hyperliquid co-founder Jeff.hl questioned the authenticity of Binance's settlement data, and for Binance to prove itself, it would have to "cut itself open to show how many bowls of noodles it has eaten."
Although Hyperliquid and Binance differ in values, the transparency and verifiability of its on-chain trading data are tangible. The transparent settlement mechanism not only significantly reduces the possibility of market manipulation by the platform but also reassures investors, reducing the birth of conspiracy theories. For instance, during several crises on Hyperliquid, people observed the actions of whales on-chain, with losing investors lamenting, while Hyperliquid remained indifferent; yet very few would consider this a conspiracy by the platform.
Mechanisms cannot be perfect, but a transparent, publicly available, and automatically executed trading mechanism within the rules will always reduce more disputes compared to the black box and chaos of centralized exchanges. Even DEX, if lacking transparency, will face skepticism. For example, the previously popular Prep DEX Aster was questioned for trading volume manipulation and data falsification due to its privacy order features, leading DeFiLlama to temporarily delist Aster.
As the crypto market has developed to this point, CEX and DEX are no longer mutually exclusive; the boundaries between CEX and DEX are shrinking, and the DEX experience is aligning more closely with CEX, while CEX is also expanding its on-chain business through exchange user wallets. Both CEX and DEX have their own risk quadrants; CEX can provide a safety net for users when real issues arise, but investors criticize its excessive power; DEX adheres to "code is law," imposing minimal constraints on user behavior, yet when issues arise, investors yearn for centralized compensation.
However, from a trend perspective, "transparency" is one of the foundations and development trends of Crypto. Even though CEX and DEX have different value systems, both should move towards this direction: higher verifiability, clearer boundaries of responsibility, and more robust crisis response mechanisms.
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