# Binance Faces Decline in Market Share as Decentralized Exchanges Rise

Binance, a leading centralized exchange (CEX), is experiencing a decline in market share, drawing attention to decentralized exchanges (DEX). One notable player, Hyperliquid, is rapidly growing in the market with its unique technology and innovative model, signaling a shift in the cryptocurrency trading landscape traditionally dominated by CEXs.

Binance has long held a dominant position in the cryptocurrency exchange market. However, its market share has significantly dropped in 2024. According to 0xScope Research, Binance’s spot market share fell to 39.54% in October 2024, down from 52.5% in the same month a year earlier, marking its lowest level in four years. The derivatives trading share also decreased to 42.5%, an 8.4% drop from 50.9% the previous year, representing the largest decline among cryptocurrency exchanges.

This downward trend for Binance is closely related to the increasing global regulatory measures. Since last year, Binance has faced investigations in several countries under regulatory scrutiny, adversely affecting investor confidence. Additionally, Binance’s fee policies and centralized structure are losing appeal as DEXs become more competitive.

# Hyperliquid Emerges as a Powerhouse in the DEX Market

While Binance struggles with declining market share, decentralized exchanges are emerging as pivotal players in the new financial ecosystem. DEXs’ market share rose from 3.8% in January 2021 to 13.6% currently.

Among these, Hyperliquid stands out with its proprietary Layer 1 (L1) blockchain and high-performance trading system. Hyperliquid aims to offer a user experience similar to CEXs in a decentralized trading environment.

Hyperliquid provides a variety of Ethereum network-compatible functions through its custom-developed Ethereum Virtual Machine (EVM) and boasts high performance with its tailored consensus algorithm HyperBFT, capable of processing 200,000 transactions per second.

This technological edge allows Hyperliquid to offer a trading environment with speed and stability comparable to centralized exchanges while providing users with full asset ownership and a decentralized trading experience.

# A Community-Centric Ecosystem and Independent Operation

Another differentiation of Hyperliquid is its adoption of a fully community-owned model. Hyperliquid operates with its own funds, without external investments, allowing the development team to grow the platform independently from external capital pressures. The community can share profits through the ‘Hyperliquidity Provider (HLP)’ program, which provides liquidity to the platform.

HLP participants receive a portion of the trading fees returned to the community. This structure realizes decentralization by transparently sharing profits with the community.

Starting as a decentralized futures exchange, Hyperliquid has recently expanded into spot trading by introducing new token standards HIP-1 and HIP-2. HIP-1 standard deploys native tokens and on-chain spot order books, similar to AMMs (Automated Market Makers), to provide liquidity. This expansion strategy positions Hyperliquid as a comprehensive platform encompassing the entire financial ecosystem.

Hyperliquid touts lower fees and a transparent trading structure compared to centralized exchanges, rapidly emerging as a viable alternative to giants like Binance. The rise of DEXs becomes more compelling as centralized exchanges face regulatory and security challenges.

# Centralized vs. Decentralized Exchanges: Future Outlook

Binance’s market share decline is closely tied to the growth of decentralized exchanges. DEXs offer transparent transaction records and full asset control to users, minimizing security issues and asset loss risks associated with centralized exchanges. New DEXs like Hyperliquid provide greater value to users through high-performance trading systems and community-centered revenue models.

Although centralized exchanges still offer high convenience and accessibility, being established projects, developments in on-chain products are improving user experience to levels similar to CEXs. DEXs also have the flexibility to quickly list trendy assets like meme coins, a challenge for CEXs due to stringent regulations and listing procedures.

If users can earn more on-chain, a faster migration to DEXs is plausible. Hyperliquid and similar DEXs secure a critical advantage in the competition with CEXs due to their flexibility and rapid listing capabilities.

This shift indicates that centralized exchanges like Binance must explore new strategies to remain competitive. The debate continues on whether large exchanges will maintain their centralized structures or adopt decentralized models to retain their market positions.

In conclusion, the rapid growth and innovation shown by DEXs like Hyperliquid are driving significant changes in the cryptocurrency exchange market. This evolution serves as an essential alternative to overcoming the structural limitations of centralized exchanges. The future of the cryptocurrency market is likely to feature intense competition between centralized and decentralized models, with the growth of DEXs like Hyperliquid at the forefront.