Author: Plain Language Blockchain
In June 2025, the proportion of DEX/CEX spot trading surged to a historic high of 37.4%, and the trading ratio of derivatives on DEX/CEX also reached a new high of 11.7% in November of the same year. The rise of on-chain trading is no longer a prediction but a fact that is happening.
At the same time, a new industry narrative is taking shape—CeDeFi, which is the deep integration of centralized and decentralized finance. OKX, as one of the leading exchanges to first productize CeDeFi, launched its built-in DEX product in November 2024, attempting to bring hundreds of millions of CEX users into the on-chain world through a model of "wallet self-custody, no mnemonic phrases, gas-free trading, and no need for cross-chain withdrawals."
What is the logic behind this product? How does it address the real pain points of users? Is CEX doing DEX really about "helping users go on-chain," or is it about "grabbing on-chain traffic"? With these questions in mind, Plain Language Blockchain engaged in an in-depth dialogue with Zexin, the head of OKX's CeDeFi business.
Zexin candidly stated that since the launch of the CeDeFi product, 80% of trading users are complete newcomers to exchanges—this means that the group truly being served is precisely those who have never touched the on-chain world before.
Below is the full dialogue:
01 DEX and CEX
Plain Language Blockchain: The trading proportions of DEX/CEX spot and contracts are continuously reaching new highs. Do you think this ratio will continue to rise in the future?
Zexin: I believe so. Blockchain is a foundational technology that will transfer some traditional industries and traditional financial assets onto the chain. This is what we refer to as RWA (Real World Assets), which is the biggest trend and goal moving forward.
In the past, our on-chain trading volume was mostly cryptocurrencies, but in the future, the on-chain transfer of these RWAs could be a major driving factor. The second factor is the currently very popular and mature prediction markets, which will also occur on-chain. So I think this trend is quite clear, and for investors, this ratio will definitely continue to rise in the future.
Plain Language Blockchain: So is the relationship between CEX and DEX one of competition or integration?
Zexin: I think it’s more of an integration relationship rather than a competitive one with CEX. Our CeDeFi business and product line itself is about bringing on-chain trading opportunities into CEX.
In the future, the positioning of CEX is likely to be an entry point, a super app. It can not only trade these centralized matched products but also trade some on-chain products. So in the future, there may not be a very clear boundary between CEX and DEX; on-chain and centralized exchanges could all be within one app, and users wouldn’t need to make a distinction.
Plain Language Blockchain: In other words, your goal is to make it so that users do not need to distinguish between on-chain and off-chain?
Zexin: Yes, users only need to care about what kind of trading target they want to buy, which is one of our goals.
The advantages of on-chain trading now include that large trading platforms will manually vet and review the background of projects to ensure they are relatively reliable. Another advantage is trading depth. Assets listed on CEX may have better liquidity, more trading users, and are more inclined towards mainstream assets. Besides these mainstream assets, a large portion of trading volume will still be on-chain.
Because there are so many projects now, but very few can get onto large CEX platforms; the vast majority are traded on-chain first. Moreover, we can see that in the past two years, so-called community and decentralized tokens may have more advantages than VC tokens, and these opportunities definitely occur first on-chain.
So I think CEX and DEX are more complementary rather than competitive. If you want to trade some highly liquid tokens on DEX, I think it would be difficult to obtain that much liquidity on-chain, so placing it on CEX would be more appropriate.
Plain Language Blockchain: Looking ahead three to five years, what do you think CeDeFi will ultimately evolve into?
Zexin: In three to five years, the wallet and trading capabilities of CeDeFi will definitely become a foundational infrastructure for CEX. We are still in the very early 1.0 stage, with 2.0 and 3.0 to come. For example, Binance Alpha is actually distinct from OKX's CeDeFi; it doesn’t mean you can directly use CEX assets to buy all on-chain assets; it only allows you to buy assets listed on Alpha, which has undergone some filtering. Our approach is a completely integrated logic.
The CeDeFi business actually has two products: the first is the wallet, and the second is the DEX. With the wallet as the infrastructure, once embedded in CEX, it can actually expand into more business opportunities. If I have a wallet, I can interact with all DEXs on-chain. We want to bring in various DApps, such as Perp DEX, prediction markets, lending protocols, all of which we can integrate into CeDeFi in the future.
02 Enabling New Users to Go On-Chain Without Feeling It
Plain Language Blockchain: OKX's built-in DEX emphasizes "no mnemonic phrases, Passkey login." But for users who have experienced the FTX incident, there seems to be a contradiction between "convenience" and "true self-custody"—how does Passkey actually work?
Zexin: Passkey is our access key; it is a system-level encryption and decryption technology provided by iOS or Google systems.
For older users, they were used to writing down or memorizing their mnemonic phrases. They might suddenly switch to this method and worry about whether it is as secure since it needs to sync to the cloud. You can simply understand that Passkey uses this technology to ensure that you have unique access through your Passkey or biometric verification.
From a user’s perspective, how did I protect my private key before? I had to remember what each mnemonic phrase was. Now, I only need to store my facial features in this system and use those facial features for password authentication, which represents my access to this wallet. We are in the form of an AA wallet, and this Passkey is the owner of our AA wallet.
Plain Language Blockchain: What is the asset protection mechanism for users if their device is lost or their account is hacked?
Zexin: The storage of private keys has always been a pain point in the industry, which is why we have our Keyless wallet, an AA wallet that uses Passkey technology to enhance the security of the AA wallet while achieving the self-custody process.
This is essentially system-level security. There may be phishing cases where someone tricks you into doing something or scanning your face, which can lead to scams. However, cases of theft are currently relatively rare.
In conclusion, wallet authentication is completed through biometric verification, helping users avoid the process of remembering and safeguarding mnemonic phrases. As long as you are not phished and do not scan links provided by others, your assets are currently relatively safe.
Moreover, in addition to Passkey, we have a backup method using email. Simply put, we will write the user's email into the on-chain contract when the wallet is activated. If your Passkey is deleted, which is also a risk, we can send an email to perform an on-chain signature to recover this Passkey. So if you delete your Passkey, we have another backup. As long as the user can control their email, then this wallet will definitely belong to them.
Plain Language Blockchain: Regarding transaction costs, how significant is the difference in costs and slippage for ordinary users between using OKX's built-in DEX and directly trading on native DEXs like Jupiter or Uniswap?
Zexin: Gas is free; the other part is the trading fee, which we do have. The underlying technology is exactly the same as OKX Web3, so all the advantages and pricing advantages of OKX Web3, including MEV protection and slippage advantages, will be applied to our CEX DEX.
Plain Language Blockchain: Compared to aggregators like 1inch, where does OKX's fee advantage specifically manifest?
Zexin: There are several factors that determine fees. The first is the slippage of your trade, which depends on the liquidity of the token on-chain. The second is the transaction fee, which we can set; 1inch has one set, and we have another, which may be slightly lower. The third is the gas fee; for us at CEX, we completely help users pay for it, but for some decentralized products on-chain, users will need to pay the gas fee themselves.
Plain Language Blockchain: The CeDeFi built-in DEX has been subsidizing gas fees since its launch, which is very attractive to users. But how long will this subsidy last?
Zexin: Our goal is long-term. However, if on-chain gas becomes very active and costs become very high, we will reassess the situation. For example, during the last cycle, Ethereum's gas could cost several hundred dollars per transaction, but now Ethereum's performance has significantly improved. Our goal is to ensure that users do not perceive gas costs and that CeDeFi's new users do not have to deal with the concept of gas.
Plain Language Blockchain: Can you provide a specific example to illustrate the core application scenario of CeDeFi?
Zexin: For instance, when Trump launched his token, many people didn’t know how to use on-chain wallets and couldn’t buy it. With CeDeFi, if Trump were to launch another token, our CeDeFi users would be able to buy it immediately.
Plain Language Blockchain: Indeed, many people were anxiously transferring money across chains to Solana at that time.
Zexin: First, there is a time cost for withdrawals, and second, users have to understand some concepts of gas and also need to exchange for gas. If I buy using USDT in CEX, then these concepts and withdrawals do not exist in the CeDeFi scenario.
03 Market Competition and Compliance
Plain Language Blockchain: Binance Alpha allows users to "get on board" popular projects early, which is very attractive to retail investors. OKX has chosen a "neutral aggregation" route; how do you bridge the perception gap in discovering early projects?
Zexin: You raised a very good question because it is also a significant challenge for us. These exchange newcomers are not familiar with on-chain, so how do you let them know what to buy? There are many on-chain tokens.
Our approach is to observe how on-chain meme players make trading decisions. We found that people often look for content on Twitter or in communities and then make purchases based on that content, such as seeing KOLs mention something.
This method will also appear in OKX; we will have a "Planet" product where there will be content and communities. We will use that to discover Alpha and help users choose, and of course, this method is also relatively neutral.
Plain Language Blockchain: But if there is too much information, users may find it difficult to filter out genuine early opportunities.
Zexin: So we are also evaluating that the more specialized the tool, the smaller the corresponding user group may be, but it could potentially discover opportunities earlier. Therefore, we are considering which tools to provide to users first, which may not necessarily be very specialized tools, considering that many CEX users are encountering on-chain for the first time.
They might just see a message from a very trusted KOL and decide to buy in, so this could be a core scenario we focus on initially. We will assess whether to improve subsequent tools or migrate them from Web3 wallets. The core is still to understand the users in this industry, especially the users of exchanges, and to understand their needs.
Plain Language Blockchain: OKX announced that DEX functionality will cover the U.S. market. What does this mean for global investors? Has the regulatory risk been completely lifted?
Zexin: Not exactly. We have always been compliant in the U.S. market, and global users can use our products. It's just that launching the DEX product embedded in the U.S. market is new.
Regarding regulation, there will always be ongoing communication, including with compliant exchanges in the U.S. like Coinbase, which have been in constant communication with U.S. regulators. We are all feeling our way across the river; we cannot say that regulatory issues are completely resolved, as there is no definitive point where everything is settled.
Plain Language Blockchain: In the CeDeFi model, although users' assets are in self-custody wallets, transaction routing, gas fee payments, and other aspects still rely on OKX's centralized services. Where are the risk boundaries in this architecture?
Zexin: If users feel there is a risk, they can transfer their wallets away. The CeDeFi product consists of a wallet and a DEX. The wallet can be migrated from CEX to a Web3 wallet through the wallet migration feature. We would then completely disengage and no longer provide services, which is a manifestation of self-custody; users can migrate their wallets at any time.
Plain Language Blockchain: Is the wallet migration process complicated?
Zexin: We have this feature, and we just launched it. You just need to click and perform a Passkey facial authentication verification, and once that is done, you can directly use your CeDeFi wallet on Web3.
It is not semi-custodial; it is self-custodial. Because you can migrate it out at any time. Even if CEX encounters extreme situations, assets can be transferred to other completely decentralized wallets.
04 User Growth and Product Layout
Plain Language Blockchain: OKX Ventures is focusing on the AI Agent field. Will CeDeFi's DEX have a layout for an AI Agent trading ecosystem?
Zexin: This is a long-term plan, combining AI Bots with the CeDeFi wallet, figuring out how to use AI Bots to help users trade better. The AI Bot we discussed this morning is still focused on strategy trading within CEX. We will integrate this later; currently, CeDeFi has not yet involved this area.
Plain Language Blockchain: The product launched in November last year. How is the user growth situation now?
Zexin: What I want to highlight is that we can see from the backend data that 80% of users in the CeDeFi wallet who have traded are pure exchange newcomers, while the remaining 20% have had on-chain activities. This means that pure exchange newcomers make up a large proportion of our product, and this group of users has a lot of growth potential.
To attract this group of users to our product, there is a lot of room for growth and user incentives internally:
Node commissions: Backend nodes can bring users in, and they can receive a commission on user transaction fees.
Boost points: Users can earn rewards through Boost points on the CeDeFi product, similar to how they do on Binance Alpha.
This means that users using this product can achieve a win-win effect.
Plain Language Blockchain: Finally, what new features can we expect from the CeDeFi product in the future?
Zexin: We have some new features to launch:
Support for Android users in the Chinese region: Currently, this product is temporarily unavailable for Android users in the Chinese region because the Passkey service is restricted there and requires Google's framework. We will later create an OKX built-in Passkey to serve this group of users.
Limit order functionality: Currently, the DEX product can only trade at market prices. Limit orders and other more mature on-chain strategies (like doubling your investment after buying) will be launched in February. The OKX Web3 wallet has long been able to place orders on the Solana chain, and we will launch the relevant limit order functionality before the end of February.
More growth activities: We will have more ways for users to earn rewards just by trading in this area.
05 Conclusion
OKX's CeDeFi strategy is not simply about "adding a DEX to the exchange," but rather a systematic reconstruction from the underlying wallet architecture to user interaction logic.
When 80% of users are pure exchange newcomers who have never interacted with on-chain, the real question CeDeFi needs to answer is not "how is on-chain better than centralized," but "how to make users not need to think about this question at all."
As Zexin said: Users only need to care about what they want to buy, not where to buy it.
When the boundaries between CEX and DEX disappear, it may mark the true beginning of crypto trading reaching the masses.
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