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2023 Outlook: What lies ahead for crypto trading & derivatives

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Marketing / DeFi / Trading

2023 Outlook: What lies ahead for crypto trading & derivatives


By ApolloX

4 months ago
4 mins read
2023 Outlook: What lies ahead for crypto trading & derivatives

Will we see another DeFi summer in 2023? We think so, but don’t take just our word for it. Hear from the experts at CryptoCompare and CoinMarketCap on the biggest trends sweeping across the crypto industry this year.

This article references these research reports:

CryptoCompare 2023 Q1 Outlook: New Year, New Narratives

CoinMarketCap 2023 Crypto Playbook

More Decentralization & DeFi

1. From CEX to Self Custody

Following the FTX crypto exchange’s descent into bankruptcy, crypto traders are migrating to self-custodial options in droves.

A survey in CMC’s Crypto Playbook found that 57% of surveyed Trust Wallet users self-custody most of their assets on Trust Wallet, one of the most popular non-custodial crypto wallets with over 25 million users globally. In fact, Trust Wallet saw a 140% increase in active users in the days following FTX’s collapse. While the remaining 43% still store a sizable amount of their crypto holdings on CEXes, DeFi infrastructure may soon catch up to push these traders into self-custody.

2. DEX will eat into CEX Market Share

CEXes averaged a monthly volume of $695 billion in 2022, nearly 7x that of monthly DEX volume at an average of over $100 billion. This is understandable — CEXes have been around for longer. That said, DEXs are steadily eating into CEX market share. According to CMC Crypto Playbook, the DEX-to-CEX spot volume ratio has been steadily increasing, peaking above 25% in February 2022. While the ratio has since fluctuated due to multiple crypto market scares, the ratio trends up overall.

CryptoCompare echoes this sentiment. While it does not expect DEX trading volume to eclipse CEX trading volume in 2023, it expects DEXes to increase their market dominance (currently 8.09%.) The outflow from CEXes into DEXes or self-custodial options during the FTX collapse was a positive sign for the rise of DEXes.

An Evolving Crypto Derivatives Market

3. Continued Growth in User Activity

CryptoCompare expects the DeFi ecosystem to thrive as macroeconomic conditions improve in 2023. Data modelled from CMC Community engagement reflects this. Engagement on CMC Community acts as a proxy of retail interest and organic activity. According to CMC, DeFi is the leading sector of interest in the first month of 2023, capturing 22.3%.

Source: CoinMarketCap 2023 Crypto Playbook

Decentralized crypto exchanges, on virtue of being the main trading venues for decentralized trading, will be some of the biggest winners in DeFi. Already, we are seeing signs of this. Decentralized derivatives, especially perpetual exchanges, are poised for growth this year.

4. Expansion of Product Offerings

As trading volume increasingly migrates to on-chain derivative DEXes, exchanges would launch new features more often to keep up with CEX functionalities. Aside from offering trading of derivatives contracts, expect to see improved features and even new DeFi products.

For example, the ApolloX derivatives exchange offers trading of perpetual contracts. However, recognizing the need for an improved trading experience, the simpler ApolloX Lite Mode was launched with a simplified interface for easier and quicker trading. What’s more, ApolloX also launched ALP, a new liquidity provider token representing a basket of assets, and new ALP perpetual contracts, in Jan. 2023.

CryptoCompare also cites liquid staking derivatives as an area of growth in the new year. Liquid staking derivatives are tokens like staked Ether (stETH) which are gained from staking ETH, and can be used for other functionalities like borrowing and lending. The upcoming Ethereum Shanghai upgrade which will allow staked ETH to be withdrawn from the beacon chain is fuelling this narrative.

Be Prepared with the ApolloX DEX Engine

Capitalize on these crypto tailwinds. The ApolloX DEX Engine is a one-stop decentralized trading solution for any business looking to launch their own decentralized derivatives exchange. Whether your business wants to expand into the derivatives market, cater to both beginner and pro traders in your user base, or even add more use cases to your native token (ask us about this!); ApolloX DEX Engine promises a fuss-free, ready-to-deploy experience. Furthermore, you can expect marketing and customer support from ApolloX to ensure a smooth onboarding.

3 Simple Steps

1. Fill in the application form and submit

Our dedicated support team will review each submitted application with care. Successful applicants will be guided to proceed to the next step.

2. Create your own domain name

Before you start, help your users easily identify you by creating your branded domain name.

3. Download our proprietary SDK and customize it according to your preferences

Customize the ApolloX DEX Engine SDK to better cater to your business needs. After mandatory testing, prepare for launch.


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