The crypto landscape is undergoing a quiet but profound transformation. Long seen as rivals, centralized exchanges (CEXs) are now actively integrating with the decentralized finance (DeFi) ecosystem. Among the latest moves, Bybit’s launch of ByReal, a Solana-based DeFi platform, signals a strategic shift not just for the exchange—but for the entire industry.
This evolution isn’t isolated. Binance has introduced Binance Alpha, while Coinbase plans to embed DeFi trading directly into its main app. These developments reflect a broader trend: CeDeFi—the convergence of centralized and decentralized finance—is no longer theoretical. It’s here.
But why are established CEXs, with stable revenue models, diving into the volatile world of DeFi?
The Strategic Shift: Why CEXs Are Going On-Chain
For years, CEXs dominated crypto trading with user-friendly interfaces, high liquidity, and fast execution. Yet, a growing challenge has emerged: innovation is happening off-chain.
New tokens increasingly debut on decentralized exchanges (DEXs) like Uniswap or Raydium—bypassing traditional listing processes. This shift leaves CEXs at a disadvantage. Regulatory scrutiny often delays listings, causing them to miss early trading volume and user engagement.
👉 Discover how top exchanges are closing the gap between CeFi and DeFi.
By launching their own on-chain platforms, CEXs can participate in early token liquidity without formal listings. They retain users within their ecosystems while avoiding direct regulatory exposure. It’s a strategic compromise—offering access without full endorsement.
This move is not just about staying relevant—it's about controlling the full lifecycle of user capital, from fiat onboarding to DeFi exploration and eventual token exit—all within a monetizable environment.
How Major Exchanges Are Building Their CeDeFi Future
While all major CEXs are moving toward CeDeFi, their approaches differ significantly in design, user experience, and target audience.
Bybit’s ByReal: CEX-Grade Liquidity on Chain
Announced in June, ByReal is Bybit’s answer to the demand for high-performance DeFi trading. Built on Solana, it combines two powerful mechanisms:
- Request-for-Quote (RFQ) system: Users receive optimized prices from professional market makers before executing trades.
- Concentrated Liquidity Market Maker (CLMM) model: Liquidity is focused around active price ranges, improving capital efficiency and reducing slippage.
Unlike traditional DEXs, ByReal delivers near-CEX execution quality—while maintaining decentralization. Users retain custody of assets via Web3 wallets like Phantom, and the platform includes a token launchpad and yield-generating Revive Vault, featuring products like $bbSOL staking.
Bybit’s goal? To create a parallel liquidity layer for early-stage tokens that may not meet strict listing criteria but thrive in open, community-driven markets.
This isn’t just another DEX—it’s a hybrid engine designed to bridge institutional-grade performance with decentralized access.
Coinbase: Dual-Track Strategy for Retail and Institutions
At its 2025 crypto summit, Coinbase unveiled plans to integrate native DEX trading into its main app, eliminating the need to switch to Coinbase Wallet.
For retail users, this means seamless access to thousands of tokens right after they’re minted—without leaving the familiar interface.
But Coinbase’s real innovation lies in its Verified Pools—liquidity pools accessible only to KYC’d institutional participants. This creates a regulated, secure environment for entities with compliance obligations.
The result? A dual-track strategy:
- Retail: Frictionless DeFi access through an integrated experience.
- Institutions: Controlled, compliant participation via verified infrastructure.
This approach allows Coinbase to serve both markets without compromising on security or usability.
Binance Alpha: Lowering the Web3 Barrier
Binance Alpha takes a distinctly retail-first approach. Accessible via a tab in the main Binance app, it lets users trade newly launched tokens directly from their existing accounts—no wallet setup, no seed phrases.
All transactions are processed on-chain, but the complexity is abstracted away. This dramatically lowers the barrier to entry for Web3 newcomers.
While criticized for some underperforming token launches, Binance Alpha succeeds in one key area: democratizing early access. Through mechanisms like Alpha Points, users earn rewards for participation—fostering engagement and loyalty.
Core Drivers Behind the CEX-to-DeFi Transition
1. Capturing Early Token Opportunities
Most new tokens now launch on DEXs due to permissionless listing models. CEXs, bound by compliance and risk frameworks, often lag behind.
By launching their own on-chain platforms, CEXs bypass this delay. They can offer early trading through semi-sandboxed environments—monetizing user activity via fees or launch incentives, while staying legally insulated.
It’s a win-win: users get timely access; exchanges capture value without full liability.
2. Preventing User Churn
Even as DeFi leads in innovation, most users still find it intimidating. Managing wallets, paying gas fees, and approving contracts create friction.
CEXs are stepping in to solve this. By embedding DeFi access into trusted interfaces, they keep users within their ecosystems—even as those users explore decentralized products.
👉 See how exchanges are turning DeFi complexity into seamless experiences.
Over time, this builds user lock-in. As traders mature, they seek yield strategies, cross-chain tools, and advanced trading—services CEXs can now provide through integrated CeDeFi layers.
The result? A self-reinforcing cycle: more services → deeper engagement → stronger retention.
The Future of CeDeFi: What Comes Next?
Blurring Boundaries Between Exchanges and Protocols
As CEXs integrate on-chain services, the line between “exchange” and “protocol” is fading. A user trading on ByReal may not even realize they’re interacting with a decentralized smart contract—not a centralized order book.
This fusion will reshape liquidity distribution, product design, and user journeys across the industry.
Institutional Adoption: Cautious but Growing
While retail adoption accelerates, institutions remain cautious. Risks like smart contract vulnerabilities, regulatory uncertainty, and opaque governance persist.
However, exchange-mediated DeFi access could serve as a trusted gateway for conservative players. Early adopters will likely be hedge funds and proprietary trading firms testing small allocations.
Large-scale institutional inflows—measured in billions—are still years away. But even hundreds of millions in strategic capital can enhance market depth and reduce volatility over time.
The Evolving Role of Exchange Tokens
Exchange-native tokens are poised for transformation. Beyond fee discounts, they may unlock:
- Priority access to new token launches
- Staking rewards in CeDeFi vaults
- Governance rights in hybrid protocols
BNB already leads in utility across Binance’s ecosystem. Others like Bybit’s BYB or future tokens could follow suit—becoming central assets in vertically integrated financial networks.
In short, exchange tokens are evolving from simple utility tools into strategic assets driving user retention and cross-platform capital flow.
FAQ: Your CeDeFi Questions Answered
Q: What is CeDeFi?
A: CeDeFi combines centralized finance (CeFi) and decentralized finance (DeFi), blending CEX reliability with DEX innovation—offering users seamless access to on-chain assets through familiar platforms.
Q: Is ByReal fully decentralized?
A: Yes—users maintain self-custody via Web3 wallets. However, Bybit influences liquidity and product design through its RFQ and CLMM systems, creating a hybrid model.
Q: Can I use ByReal without leaving Bybit?
A: Not yet seamlessly, but integration is expected. Currently, you connect your wallet to access ByReal’s platform directly.
Q: Are CEX-run DEXs safer than independent ones?
A: They offer enhanced UX and brand trust, but smart contract risks remain. Always audit or use platforms with strong security track records.
Q: Will CeDeFi replace traditional DEXs?
A: Unlikely. Independent DEXs will still serve privacy-focused and anti-censorship use cases. But CeDeFi may dominate mainstream adoption due to ease of use.
Q: How do exchange tokens benefit from CeDeFi?
A: They gain new utilities—such as staking rewards, launchpad access, and fee reductions—increasing demand and ecosystem stickiness.
The Road Ahead: Integration Over Disruption
The rise of CeDeFi marks a pivotal moment. Rather than resisting DeFi, CEXs are absorbing it—building semi-decentralized networks that attract both users and protocols.
Independent DeFi projects may increasingly rely on—or be absorbed by—these expanding ecosystems. The result? A more unified market where liquidity flows freely between centralized and decentralized realms.
Bybit’s ByReal is more than a product launch—it’s a signal of what’s coming: a hybrid financial future where convenience meets innovation.
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