Crypto as It Should Be: Why Traders Are Moving From CEX to Non-Custodial Solutions
ETH supply on centralized exchanges (CEX) has dropped to its lowest level since 2016, CryptoQuant analysts reported.
“This dynamic reflects increased caution among traders and reduced short-term selling pressure,” the report states.
Representatives from exchange service ChangeHero add that market participants expecting price growth increasingly choose non-custodial solutions for asset storage. As liquidity flows out of CEX, decentralized services allow users to maintain flexibility and respond quickly to market changes without interacting with centralized infrastructure.
Why Traders Are Leaving Exchanges
The traditional path of exchanging cryptocurrency through CEX involves several stages: depositing funds to an exchange account, waiting for deposit confirmation, executing the swap, and withdrawing funds to an external wallet. Each step takes time and carries the risk of platform hacks.
After the collapse of FTX, BlockFi, Celsius, and Genesis, CeFi platforms are losing their dominant position — user interest is gradually shifting toward decentralized platforms.
Beyond counterparty risks, centralized exchanges require mandatory user verification. KYC procedures involve providing documents, proof of address, and sometimes proof of source of funds. For users who value privacy, such requirements become a barrier and contradict Bitcoin’s original principles.
How Non-Custodial Exchanges Work
Non-custodial exchanges process transactions directly between user wallets. Unlike CEX, these services don’t hold client funds and don’t require registration.
ChangeHero is one example of such platforms. The service has been operating since 2017 and supports exchanges of over 400 cryptocurrencies and tokens. In addition to crypto operations, the platform allows users to buy digital assets with fiat through payment providers FinchPay and Mercuryo.
Key features of the service:
- No registration required. Users don’t need to create an account or complete verification to make an exchange. ChangeHero applies a risk-based KYC policy: documents are only requested if the system identifies elevated risks for a specific transaction;
- Fixed and floating rates. Users choose the rate type based on market conditions. Fixed Rate (up to 0.7% fee) protects against volatility during the transaction, while Best Rate (up to 0.5%) offers prices close to market rates;
- Partner program. The service offers integration via API and widgets for websites and applications.
Exchange Process
Exchanging cryptocurrency through ChangeHero consists of four steps.
Selecting a trading pair. On the service’s main page, select the crypto asset to send and receive. At this stage, you can leave the Best Rate checkbox enabled or disable it to use a fixed exchange rate. For example, when exchanging 30 USDC (BEP-20) for Tether (USDT) on the Solana network, you would receive 29.36 USDT with Best Rate and 29.30 USDT with Fixed Rate.
Entering the recipient address. Enter the wallet address (in our case, a Solana address for the Phantom Wallet) where funds will arrive after the exchange.
Sending funds. ChangeHero generates a deposit address. Scan the QR code for the BNB Chain address and transfer 30 USDC from your wallet (in our case, Uniswap Wallet).
Processing and crediting. After the transaction is confirmed on the network, the service sends funds to the recipient address. From confirmation to receiving funds on Phantom took about one minute.
Throughout the entire process, transaction status can be tracked directly on the exchange page.
Use Cases
Non-custodial exchanges are in demand in several situations:
- Quick swaps during volatility. A non-custodial exchange allows you to complete a transaction directly from your wallet in just a few minutes;
- Cross-chain operations. Exchanging assets between different networks through traditional tools requires using bridges or exchanges. Non-custodial exchanges allow you to quickly swap one asset for another without registration or interacting with DeFi protocols;
- Security and transaction privacy. For users who store funds in wallets and want to minimize interaction with centralized platforms, services like ChangeHero offer a wide selection of trading pairs with competitive fees.
However, non-custodial exchanges don’t fully replace CEX. Complex order types, leveraged trading, Earn products, and other services that most exchanges provide today are not available on them.
Services like ChangeHero are designed for quick swaps of one cryptocurrency for another. Active trading with technical analysis and complex strategies still requires centralized exchange tools.
Earlier, ForkLog explored why the crypto lending market is moving to DeFi.
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