Have People Finally Moved On From Centralized Crypto Exchanges?

The demise of the FTX empire which transpired over the course of ten consecutive days in November of 2022, came as a tsunami for the broader crypto market. On November 11, 2022, FTX submitted a petition for protection under Chapter 11 of the United States Bankruptcy Code, while Bankman-Fried the founder resigned. According to the documents filed by FTX in its bankruptcy case, the company, which was valued at $32 billion, has $8 billion in liabilities that it cannot pay to as many as 1 million creditors.

The Positive Side Of FTX Faisco

The shocking failure of FTX can be explained by the age-old tale of managerial arrogance, excessive risk-taking, and inadequate regulation and risk management. However, the disaster has also provided us with additional material for reflection on the significance of risk management culture and leadership.

Read More: Check Out The Top 10 DeFi Lending Platforms Of 2023

If there’s one silver lining from the debacle, it was that crypto investors learning the importance of decentralized finance over centralized exchanges. The fact that customer funds can get stuck is not new and was pretty evident from the days of the Mt.Gox exchange failure. However, as per recent on-chain data, it can be seen that users have finally understood the significance of transferring money out of exchanges and gaining self-custody of their funds.

DeFi Use On The Rise

According to data obtained from Santiment, a behavior analysis tool reveals that a total of more than 350,000 Bitcoins has been withheld from cryptocurrency exchanges while 260,00 BTC have been withdrawn from those markets, since November 2022.

A number of users have removed their assets from cryptocurrency exchanges and are now trading their funds using non-custodial solutions. On November 11, the day that FTX filed for bankruptcy, Uniswap, which is one of the major decentralised exchanges (DEX) in the ecosystem, saw a huge surge in trading volume.

The nascent ecosystem of DEX platforms may be susceptible to their own unique set of vulnerabilities and risks; however, observers of the industry believe that adequate due diligence and the elimination of human error could make DEX platforms the preferred choice over CEX platforms in the near future.

Also Read: Bitcoin Price Flashes Buy Signal; Is This The Best Time To Buy BTC?