Caixin: The Binance hacking incident may present opportunities for DEX, potentially driving a short-term surge in trading volume and locked assets

According to Caixin, the Binance hacking incident may present opportunities for decentralized exchanges (DEX). Each time a major centralized exchange (CEX) experiences a sudden significant security incident or trust crisis, DEX and the entire DeFi sector tend to see a notable influx of capital and development opportunities, and this time is no exception.

The advantage of DEX is that its security is guaranteed by computers and cryptography, preventing situations where malware is implanted or systems are breached due to social engineering attacks. The hard rules on-chain for DEX are strictly enforced, such as time locks and automatic circuit breakers. Even if hackers obtain the keys, they must still adhere to the rules set by the contracts.

This security incident also once again sounds the alarm for "Not your keys, not your coins." A large number of users, due to concerns about the security of centralized custody, will withdraw their assets to personal cold wallets or on-chain non-custodial wallets. Once the assets flow back on-chain, the trading, liquidity mining, and wealth management demands of this portion of idle funds will be directly taken over by leading DEXs like Uniswap and Jupiter, driving a surge in DEX trading volume and total value locked (TVL) in the short term.