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Change is afoot in the decentralized finance (DeFi) space. Some of the world’s biggest CEXs are shifting their businesses on-chain. Coinbase, Bybit, and Binance have all announced launches and updates that offer a bridge between CEX stability and the advanced capabilities available to DEX users.
It looks like crypto’s ‘DeFi mullet’ thesis may finally be coming true, where FinTech firms weave Web3 protocols into their Web2 platforms. The result is a hybrid model that delivers the benefits of DeFi through a familiar TradFi interface.
User-friendly in the front, blockchain-powered in the back? We look at the three latest moves to make DeFi more aligned with mainstream finance.
Key Takeaways
- Some of the world’s biggest centralized crypto exchanges have begun to offer access to Web3 financial channels through their Web2 interfaces.
- Binance, Coinbase, and Bybit have all made recent moves to extend their presence in the decentralized finance space.
- Each is following its own path, but the direction of travel is the same: the point where CEX and DEX growth intersect.
- For end users, a new hybrid crypto trading model is emerging that offers the best of both worlds. Web2 convenience in the front, Web3 architecture in the back.
Web2 in the Front, Web3 in the Back
Why would centralized crypto exchanges (CEXs) like Coinbase, with their broad base of liquidity and users, want to risk venturing on-chain? Decentralized finance protocols can be notoriously difficult for end-users to navigate, and there are long-standing concerns about security and regulatory oversight in this space.
The truth is that DeFi is growing too quickly for CEXs to ignore. The market was worth an estimated $20 billion last year and is forecasted to reach $230 billion by 2030 – an annual CAGR of 50% or more.
DeFi is starting to throw off the shackles of technical complexity and moving to mainstream acceptance.
Double-digit CAGR is in the cards for CEXs too. But DeFi has almost double the momentum. They don’t want to be left behind.
And that’s a real risk. Centralized exchanges are basically modelled on conventional brokerages. They operate in ways that are familiar to everyday retail traders, but their technical infrastructure makes it hard to penetrate the on-chain space.
Recent announcements suggest that CEXs are starting to move away from being centralized matching platforms and evolving into deeply-integrated trading networks that fuse on-chain and off-chain benefits.
The DeFi mullet idea began in 2022 when OKX embedded crypto wallets into its website and app, making it easier for users to switch between custody on the exchange or self-custody with dApp access.
Hyperliquid reached new all-time highs again:
+ Open interest: $10.1B
+ 24h fees: $5.6M
+ USDC TVL: $3.5BWelcome to all new members of the ecosystem. pic.twitter.com/AoWVPRINGA
— Hyperliquid (@HyperliquidX) May 26, 2025
Then, Hyperliquid broke the mold in 2024 by competing directly with CEXs on usability and sophistication.
Offering a high-performance blockchain purpose-built for crypto trading, it captured nearly three-quarters of the on-chain perpetual futures market in just a few months.
In March 2025, its trading volumes reached $175 billion, putting it at about 10% of Binance’s volume – something previously unheard of for a DeFi platform.
Binance, Bybit, and Coinbase took notice and are now making their own stylistic twists on the mullet concept.
Coinbase Offers DEX Access Through Its CEX
On June 12, 2025, Coinbase announced it was integrating DEXs on its proprietary Base blockchain with its centralized exchange business, with plans in the pipeline to add DEXs from other blockchains.
For end users, the move opens up trading access to thousands of altcoins but without Ethereum’s (ETH) gas fees, though Coinbase’s trading fee structure still comes into play.
For big Base DEXs like Aerodrome, having a direct link to the Coinbase mainstream exchange has delivered a major boost. Its AERO token has spiked since the announcement.
“We will be integrating DEXs from @base directly into the main @coinbase app, enabling Coinbase users to access and trade millions of assets onchain.”
Aerodrome’s best-in-class trading execution will soon be coming to millions of @coinbase users. The world is coming onchain. 🛫 pic.twitter.com/O6tpIlt0oW
— Aerodrome (@AerodromeFi) June 12, 2025
It’s not the first time Coinbase has tried to leverage its Web2 footprint on-chain. The exchange’s wrapped token for Bitcoin, cbBTC, was bootstrapped using Coinbase as the primary rail to attract liquidity and users.
With direct access to Base’s lending markets, cbBTC holders can now easily borrow USDC using Bitcoin (BTC) as collateral, without ever leaving the Coinbase app.
In May, Binance launched its Alpha campaign, a series of trading contests that reward users with “Alpha Points” that can be used to buy selected digital assets, which users receive later in the form of airdrops. It’s meant to encourage support for new projects and build grassroots engagement.
We’re pleased to announce that Binance will be the first platform to feature Moonveil (MORE)：
🔸Binance Alpha trading opens on 2025-06-27 12:00 (UTC)
Eligible users will need to use Binance Alpha Points to claim their airdrop on the Alpha Events page once Alpha trading opens.… pic.twitter.com/ILezxvVUSk— Binance (@binance) June 25, 2025
The approach has many steps, but Binance appears to have its eye on growing wallet use and participation in its on-chain ecosystem. To use Alpha points, they have to be traded through Binance’s keyless Binance Wallet. This could be a way to funnel more users into Binance’s proprietary DeFi services via the BNB blockchain.
It seems to be working. PancakeSwap is the tool enabling Alpha token trades, and its volumes have surged since Alpha’s May launch.
Bybit Launches a Hybrid Exchange
On June 15, 2025, Bybit announced the launch of Byreal, a new Solana DEX that promises a hybrid exchange model that leverages centralized liquidity sources with decentralized execution. The combination should enable Byreal to route trades more profitably.
It’s official. Byreal is here.👋🏽
Incubated by @Bybit_Official, born on @Solana.
Byreal is a new onchain liquidity network for the next wave of assets — where real value is listed, discovered, and traded transparently. pic.twitter.com/seDoKdZCKw
— Byreal (@byreal_io) June 15, 2025
Positioned as an extension of Bybit rather than a new product, Byreal’s design will see it route transactions via mechanisms called Concentrated Liquidity (CLMM) and Request for Quote (RFQ).
The idea is to unify liquidity sources and increase protection against MEV tactics by miners and validators. Execution is provided by market makers or liquidity providers, depending on the coin and conditions attached to the trade.
The Bottom Line
Three centralized exchanges, three on-chain strategies. Combined, they’re loudly signalling that the on-chain economy has moved to a new phase of maturity. DeFi has demonstrated the stability and security that regulated CEXs need to integrate DeFi infrastructure into their technology stacks with confidence.
While the convergence of CEXs and on-chain ecosystems gives big-name exchanges an on-chain presence, it also marks the emergence of a new model. We may be at the start of a new crypto trading paradigm.
FAQs
Is Coinbase a DEX or CEX?
Why are centralized exchanges shifting from CEX to DEX models?
How are platforms like Coinbase and Bybit transitioning to on-chain trading?
References
- Decentralized Finance Market Size | Industry Report, 2030 (GrandViewResearch)
- Cryptocurrency Exchange Platform Market Size Report, 2030 (GrandViewResearch)
- Aerodrome Finance price today, AERO to USD live price, marketcap and chart (CoinMarketCap)
- PancakeSwap Volume (DefiLlama)
